Bosnia and Herzegovina is facing an increasingly severe labor shortage, with the country’s annual quota for foreign work permits being fully utilized within the first five months of the year. Business leaders are now urging authorities to abolish permit quotas altogether and allow unrestricted employment of foreign workers to meet growing demand across multiple sectors.
The total annual quota for 2026 was set at 7,427 work permits, an increase of 1,500 compared to the previous year. However, employers say the available permits were exhausted by the end of May, while thousands of additional workers are still needed.
The shortage affects a wide range of industries, particularly manufacturing, construction, hospitality and retail.
“There is always a lack of labor in the metalworking industry and construction. More recently, we have also seen shortages in the hospitality sector. Even shops now employ a large number of foreign workers,” said Mirsad Jašarspahić, President of the Federation of Bosnia and Herzegovina Chamber of Commerce.
Business representatives argue that the current system no longer reflects labor market realities and that the process of employing foreign workers should be significantly simplified.
Saša Aćić, Director of the Union of Employers of Republika Srpska, said authorities should seriously consider abolishing work permit quotas altogether.
“Looking at labor market projections, we can expect demand for foreign workers to be much higher in the future. Neighboring countries such as Croatia, Serbia and Montenegro already issue significantly more work permits than Bosnia and Herzegovina,” Aćić said.
The hospitality industry remains among the sectors experiencing the greatest staffing shortages, particularly during the summer tourist season. While many employers still rely on domestic workers, students and retirees, industry representatives acknowledge that hiring foreign employees will likely become unavoidable.
“It’s still a struggle to avoid hiring foreign workers because it is easier to work with the local labor force. This year we may manage, but by next year we will probably have to employ foreign workers, especially for kitchen and support positions,” said Zlatan Tatić from the Republika Srpska Hospitality and Tourism Employers’ Association (Horeca).
Economists argue that restricting the number of foreign workers directly harms economic growth.
“If there is no domestic workforce available, it has to be imported. If employers want to double the number of foreign workers, there is no reason the administration should prevent that. They would not seek foreign workers if local employees were available,” said economic analyst Zoran Pavlović.
Demographers warn that the country’s reliance on foreign labor will continue to increase due to decades of negative demographic trends and the ongoing emigration of citizens to wealthier European countries.
Aleksandar Čavić, a demographer, said Bosnia and Herzegovina could undergo profound demographic changes in the coming decades.
“In an optimistic scenario, after 2050 we will first reach a balance between the migrant and resident populations, after which the migrant population could become dominant. Most of these demographic challenges will emerge within the next 10 to 15 years,” Čavić said.
Experts warn that without comprehensive demographic and labor market reforms, Bosnia and Herzegovina will become increasingly dependent on foreign workers while its domestic workforce continues to shrink, posing significant long-term economic and social challenges.
