As Croatia’s tourism sector gears up for another busy summer, the country is increasingly relying on foreign labour to plug growing workforce gaps. 

Labour shortages have become a defining feature of Croatia’s post-pandemic economy, reflecting long-term demographic challenges facing one of Europe’s top tourist destinations.

The World Bank warned in a recent report that the country is at a “critical demographic crossroads”. Nearly 400,000 people have left Croatia over the past decade, placing it among the EU’s top five countries for population decline. The proportion of elderly citizens has jumped to 22.5%, and by 2050, that figure is expected to reach 30%.

The combination of emigration, ageing and insufficient domestic labour supply is hitting key sectors hard – none more so than tourism, which accounts for around 20% of GDP. Ahead of the 2025 summer season, industry leaders and state officials say Croatia needs up to 70,000 seasonal workers.

Bu 2030, the country is projected to need as many as 450,000 to 500,000 foreign workers due to worsening demographic trends and a declining workforce, business representatives said at a Croatian Chamber of Economy (HGK) conference in March. 

“In recent years, the tourism sector has increasingly mirrored the construction industry, which has long relied on foreign labour. Now, it’s tourism that is being rescued by workers from abroad,” Ivana Mehle, deputy director of the Croatian Employment Service (CES), told public broadcaster HRT in February. 

According to Mehle, employers began advertising for seasonal jobs as early as January, but the number of job postings later dropped sharply. “In the first six months of 2022, around 30,000 seasonal workers were sought. By 2023, that number had fallen to just 21,000,” she said, attributing the drop to more employers hiring directly from third countries due to simplified procedures under Croatia’s liberalised Foreigners Act.

The shift is visible in the numbers. According to the Ministry of Interior, nearly 80,000 work permits were issued to foreign nationals in 2023, up from less than 10,000 in 2016.

Historically, neighbouring Bosnia & Herzegovina has been Croatia’s largest labour source, supplying 38,000 workers last year. 

Now employers are increasing looking to Asia for their workforce. In early 2025, Nepalese nationals topped the list of recipients of new permits, with 35,635 issued in just two months, followed closely by workers from India (28,000) and the Philippines (14,700).

By March, Nepalese workers became the largest group of foreign labourers in Croatia, overtaking Bosnians, the country’s Ministry of the Interior said.

Foreign workers are mostly employed in construction, hospitality, manufacturing and tourism – sectors grappling with persistent shortages of skilled staff. In the hospitality industry, roles such as waitstaff, cooks, cleaners and hotel attendants are in particularly high demand during the tourist season.

An OECD report highlights regional disparities in the labour market. Adriatic Croatia, home to popular tourist hubs such as Dubrovnik and Split, faces the most acute shortages, with 39% more vacancies per unemployed person than the national average. By contrast, Pannonian Croatia, the country’s least developed region, suffers from underemployment and brain drain. In one small town near the border with Hungary, the municipality offered houses and building plots for just €0.13 in an attempt to convince young people and families to move there.

The employment rate nationally is at 66.2%, below the OECD average of 69.4%. But all Croatian regions have now exceeded pre-pandemic employment levels, with the Adriatic coast showing the strongest recovery.

“This shortage is further compounded by the continued reliance on foreign workers, particularly from countries like Bosnia and Herzegovina, Nepal and India,” the OECD said in the report. “The lack of available skilled staff is one of the main barriers to business investment and a faster green transition, and the reason behind labour shortages in key sectors of the economy such as tourism, construction and industry. Lack of skilled workers is also a major limiting factor in services including ICT, health, social and long-term care.”

In response, the Croatian government has implemented reforms under its Recovery and Resilience Plan. These include programmes for upskilling, support for vulnerable groups and amendments to immigration laws. A new Demographic Revitalisation Strategy is also underway.

Still, experts stress that immigration alone is not a panacea. “If Croatia can further advance policies to harness the untapped potential of the domestic labour force, attract foreign workers across the skills spectrum and elevate the skills of both current and future workers, it could pave the way for stronger economic growth and increased competitiveness in this changing world of work,” said Anna Akhalkatsi, World Bank director for the European Union, according to a press release from the development bank.

While wages are rising in an effort to attract seasonal staff – hotel and restaurant workers can now earn up to €1,400 a month, with management roles reaching €2,000 – the long-term challenge remains balancing economic growth with a rapidly shrinking and ageing population.