LABOUR MARKET OPPORTUNITIES AND CHALLENGES

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

Baiji District, Salah al-Din Governorate

IOM Iraq – May 2020

This programme is supported by:

List of Acronyms

BEP Business Expansion Package

BSP Business Support Package

CIP Community Implementation Plan

CoC Chamber of Commerce

CoI Chamber of Industries

CRC Community Resource Centre

ESP Employment Support Package

FGD Focus Group Discussion

FT Farming Training

IDP Internally Displaced Person

ISIL Islamic State in Iraq and the Levant

IOM International Organization for Migration

JP Job Placement

LMA Labour Market Assessment

NFI Non-Food Items

MoLSA Ministry of Labour and Social Affairs

OJT On-the-Job Training

SME Small and Medium Enterprise

VT Vocational Training

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TABLE OF CONTENTS

List of Acronyms 2

IOM Disclaimer 2

Table of Contents 3

Executive Summary 4

Study Introduction 6

Labour Market Assessment Overview

District Overview

Assessment and Methodology Overview

Findings 8

Attitudes Towards Entrepreneurship and Cash

Types of Jobs Available

Skills Gaps

Recruitment Mechanisms

Supply-side Bottlenecks

Demand-side Bottlenecks

Conclusions 12

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Labour Market Opportunities and Challenges

EXECUTIVE SUMMARYIOM conducts livelihood programming in 15 out of 18 governorates in Iraq. As part of the Returns and Recovery Unit programming, the International Organization for Migration (IOM) undertook a labour market assessment (LMA) in Baiji district in December of 2019.

LMAs have been conducted in over 30 locations across Iraq and give insights on the state of the local market in a given area, the hiring preferences of employers and the available skills and aspirations of jobseekers, among others.

STUDY COMPONENTS

LMAs consist of both qualitative and quantitative exercises: Key Informant Interviews (KIIs), multisectoral community workshops and surveys with jobseekers, employers and consumers.

This LMA consisted of 10 individual interviews and a community workshop, conducted in December 2019 (employer surveys and Key Informant Interviews) and September–October 2019 (focus group discussions, consumer and jobseeker surveys).

This LMA focused specifically on Baiji, a district in Salah al-Din governorate.

A summary of key findings is included below, followed by recommendations for future interventions..

KEY FINDINGS

• Respondents said that jobs in construction (some also mentioned agriculture) were the most desirable in the community, with participants also noting a preference for owning their business.

• Women earned on average 38 per cent of household incomes.

• Jobseekers reported that the main economic sectors currently hiring were in construction, municipal work, grocery shops (and small shops in general), and to a lesser extent transportation, cafes, cleaning, and salons (four said that no sector was hiring in their opinion). These businesses were rated as mostly not desirable (only four thought that grocery shops, small businesses, construction, and salons were desirable fields of work).

• Employers reported that working hours averaged 9.1 per day. No business owner mentioned having written contracts with workers.

• Average wages for skilled and unskilled workers among the businesses surveyed ranged from 200 United States dollars (USD) to 1000, and USD 100 to 500, respectively.

• Women-owned businesses generally included sewing, small shops and grocery shops, handicrafts, private teaching, salons, agriculture and poultry in rural areas. Key informants reported that these businesses were mostly profitable.

• Workshop participants noted that PVC, smithery, carpentry, ice factories, water factories, plumbing, and car services have potential for expansion and these were also reported as skills perceived as desirable among youth. For women, in addition to sewing, hair and beauty salons were reported as being in demand and women said to be willing to work in these sectors in Baiji.

• Sixty-three per cent of jobseekers mentioned that grocery shops and restaurants, followed by less mentioned sub-sectors such as maintenance of electronic devices, transportation, pharmacies, butchers, and construction as sectors experience some challenges in finding adequately trained employees.

• Employers, who were also asked about skills, mentioned cutting/installation of glass, cooking, beauty professionals, knitting/embroidery/sewing, and smithery as skills that are hard to find.

• The highest salaries are mostly found in construction, manufacturing, general trade of pharmaceuticals and chemicals, and food (bread and pastries; but, a restaurant and cafeteria also mentioned paying higher salaries). However, manufacturing, mostly in PVC and aluminum, is found among the lowest salaries.

• The manufacturing, construction, food, hospitality, and trade (a pharmacy) sector are found among sectors experiencing average demand and paying higher salaries. Higher salaries with high demand are found in general trade with chemical products.

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Recommendations

SECTORS TO TARGET

Agriculture/livestock (in general, poultry, fish breeding, wheat), food (water, ice, flour), manufacturing (PVC, aluminum, water tanks, carpentry), construction (roof tiling, blocks, bricks), general trade (pharmaceuticals, chemicals, in general), services (mechanics), textile

SECTORS TO AVOID Metal

ACTIVITIES TO TARGET

• Business support packages and business expansion support packages in manufac-turing (carpentry, PVC), mechanics, plumbing, mobile maintenance, trade (clothes, grocery shops, electrical appliances, mobile phones, stationery, furniture), tailoring (for women), tailoring (for men), hairdressing/beauty services

• Vocational training in sewing for men and women, mechanics skills, plumbing, carpentry

• On-the-job training in manufacturing (PVC, carpentry, and other), glass cutting/installation, food processing, hairdressing/beauty services

ACTIVITIES TO AVOID VT sewing for women as these were reported as having skills

CASH FOR WORK (CFW)

CFW is recommended as consumers reported not having any savings and 33% reported having debts. Based on the multi-stakeholder workshop, CFW could include: school painting and rehabilitation of the sanitation facilities at Al-Tadamin primary/secondary school; rehabilitation, including all facilities of Al-Farooq and Al-Batool schools; soccer playground grass planting; cleaning campaign, including hiring of drivers and distribution of containers for thrash; awareness sessions on mines, first aid; rehabili-tation of local council building to be used for various community activities in Al-Siniya

UNRESTRICTED CASH

Cash services are preferable as more than half of job-seekers reported preferring cash assistance. Seventy-three per cent of employers mentioned having multiple suppliers for their goods

PROFILES TO TARGET

Women (especially female-headed households), people with disabilities, unskilled workers, graduates, internally displaced persons (including youth, female-headed house-holds, graduates)

NOTES

Agriculture is a good sector through which to target women who are part of the work-force, as it seems they are already present in running some agricultural businesses

Construction jobs were noted as desirable here, a rare occurrence

Table 1. Recommendations

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STUDY INTRODUCTION

1 András Derzsi-Horváth, Mario Schulz, Hana Nasser, Iraq After ISIL, 2017, https://www.gppi.net/2017/09/13/iraq-after-isil-baiji

2 IOM, Displacement Tracking Matrix, 31 October 2019.

IOM recognizes that the private sector is an engine for growth; therefore, it strives to create inclusive markets at the individual, community and institutional levels. At the individual level, IOM has prioritized support to micro enterprises, including providing business development services (for example business advisory services) and Business Support Packages (BSPs), including in-kind and cash support, all of which aim to increase income generation at the household level.

For those individuals who need capacity development support or who have specific backgrounds such as agriculture, IOM provides specialized skills development and training through Vocational Training (VT), Farming Training (FT) or On-the-Job Training (OJT), accompanied by employability assistance – inclusive of in-kind items tailored to enhance individual employability. For beneficiaries who already have relevant education or training and need to gain hands-on work experience, IOM’s job placement and job matching initiatives link participants with businesses in growth sectors, and pays their salaries partially or fully for three to six months.

At the community level, through the Enterprise Development Fund (EDF), IOM provides support to slightly larger businesses – small and medium enterprises (SMEs) – to support long-term job creation and the expansion of local production capacities. IOM also targets the infrastructure needed to support markets. For example, in agricultural communities IOM may support irrigation projects. At the institutional level, IOM provides capacity building to national and local authorities, including market assessments that seek to promote institutional change in support of local livelihoods.

LABOUR MARKET ASSESSMENT OVERVIEW

IOM’s LMAs are intended to provide actionable recommendations for the individual livelihood assistance that IOM provides in multiple districts throughout Iraq. This LMA focuses on the communities of Hay Al-Muhandiseen, Al-Asry Al-Shimaly, Al-Siniya, Al-Asheteeh Village in Salah al-Din Governorate, and includes interviews and a community workshop conducted in each community.

DISTRICT OVERVIEW

Baiji town is located next to a major oil field in Salah al-Din Governorate, with a pre-crisis population (mostly Sunni Arabs) estimated at 205,000.1 Historically, Baiji’s economy has been

largely dependent on the functioning of the oil refinery. Baiji is vital to Iraq’s economy because it has the country’s largest oil refinery as well as ancillary industries, including a fertilizer factory and a power plant. At its peak, the refinery complex employed more than 20 per cent of the district’s workforce and supplied more than a third of Iraq’s domestic energy needs (petrol, diesel, heating oil, motor oil), worth between USD 5.5 and 6.5 million per month. In June of 2014, the Islamic State of Iraq and the Levant (ISIL) launched an offensive to seize control of the city and the oil field. The ISIL offensives and the Iraqi Security Forces counter-offensives to reclaim control over the town displaced most civilians living in the city and surrounding villages, damaged the refinery and destroyed large parts of the city’s infrastructure.

The Popular Mobilization Forces and local police are present in Baiji and these were reported as having a good relationship with the community. Some mine contamination was reported on the outskirts of Al-Siniya, where some clearance was conducted. Some areas of Al-Siniya are not accessible (for example Al-Asriya). As of December 2019, no threats of eviction were reported, although this might change in the near future. Overall, as of November 2019, 1,482 people were displaced in Baiji.2

Electricity is overloaded in Baiji and is supplied for less than eight hours per day. The power network is partially destroyed, the wires and poles are damaged, and the transformers were stolen. There is no plan for improving the electricity in the area. All schools in the Al-Asry area have been rehabilitated but two schools still need expansion and latrines, and three schools need concrete casting of playgrounds. Some schools in Al-Siniya have poor sanitation facilities, limited access to electricity, and do not have water taps.

Medicines, equipment, and health services are limited in Al-Siniya. There is no primary health care centre operating in Al-Asry. A primary health centre was established by a nongovernmental organization in Al-Shatt area, but it is insufficient to cover the health needs of the population. Private clinics were reported in these locations but these were considered as being very expensive.

Water provision by pipeline in Al-Asry is only operational two hours per day four days a week. The water is sufficient but issues with the pipeline or the pumps were reported, so people need to buy drinking water. Water provision in

https://www.gppi.net/2017/09/13/iraq-after-isil-baiji

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Al-Siniya is also for two hours per day, four days a week; the quantity was reported as not being sufficient for daily use, especially during summer. People mostly buy drinking water, spending about USD 17 per month on water needs. Water quality is not optimal and quantity is insufficient because the pump station is not operating at full capacity. Illegal use of the water for irrigation was also reported. The water network needs rehabilitation as oil was found in some pipes.

CONSUMER SPENDING SNAPSHOT

• Key weekly expenses: The typical consumer in Tikrit district reported spending an average of USD 113 per week on food for their household.

• Key monthly expenses: Almost a third of survey respondents reported having a monthly rent expense, averaging USD 274 per month; and all reported monthly expenses on temptation goods, such as alcohol and tobacco, averaging USD 57 per month.

ASSESSMENT AND METHODOLOGY OVERVIEW

The LMA process began in December of 2019, after a two-day training on labour market assessment objectives and the tools for data collection. Following the training, community-level workshops with youth, women and local residents were organized in December of 2019, followed by key informant interviews (KIIs), jobseeker, employer and consumer surveys.

Multisectoral Community Workshops

Two multisectoral workshops were conducted in Baiji, one in Al-Asry Al-Shimaly (20 Returnees) and one in Al-Siniya (23 Returnees). After introducing IOM and its programming, staff explained IOM’s plan to work closely with community members in implementing future programmes..

Key Informant Interviews

Ten key informant interviews were conducted with representatives of the business community in Baiji district. KIIs seek to establish trends and observations about the business community, sectors and businesses currently hiring, ongoing public and private investment, and key emerging sectors capable of generating employment.

Jobseeker Surveys

Jobseeker surveys are designed to identify preferences of unemployed and underemployed workers. In Baiji district, 30 jobseekers were identified and surveyed. The survey’s purpose was outlined for each jobseeker survey, and informed consent was obtained from those surveyed.

Employer Surveys

Thirty employer surveys were also conducted in Baiji district in the district’s centre and in Al-Siniya, to provide a sample as representative as possible of the local market. Employers were initially provided an advance copy of the handout materials and then later contacted for follow-up interviews.

Consumer Surveys

The consumer survey was designed to triangulate data related to demand, income and vulnerability. In commercial or industrial districts in Baiji district, members of the public were approached and 30 of them identified as respondents. There were no restrictions on the demographic profiles of participants, but IOM sought diversity to the extent possible.

The table below outlines the types and number of surveys conducted for Baiji district.

TOOLSMALE

RESPONDENTS

FEMALE

RESPONDENTS

TOTAL NO.

OF SURVEYS

CONDUCTED

Multi-sectoral

Community Workshops

35 8 43

Key Informant Interviews

10 0 10

Jobseeker Surveys

23 7 30

Private Sector

Employer Surveys

29 1 30

Consumer Surveys

25 5 30

Table 2. Surveys Conducted in Baiji for Labour Market Analysis

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FINDINGSRespondents, self-classified as unemployed or underemployed, reported some differences in the years of work experience they had, whereby it was higher among women with 3.2 years, compared to 2.6 for men.

ATTITUDES TOWARDS ENTREPRENEURSHIP AND CASH

Multisectoral workshop participants felt that a high percentage of youth in their community were unemployed, with 40 per cent to 50 per cent of women reported as being unemployed. The high unemployment rate was reported as causing conflicts in the community. Jobs in construction (and agriculture, mentioned by some respondents) were noted as most desirable in the community, with participants also noting a preference for owning their business (87%), suggesting an overall preference for entrepreneurship in the community.

Most KIIs felt that cash support would not cause inter-household and community conflict. Seventy per cent of jobseekers reported that people are not comfortable paying for goods and services in cash. Women earned, on average 38 per cent of household incomes (however, most do not contribute, as those who do are the sole earners of female-headed households), and 47 per cent of jobseekers reported preferring in-kind assistance over cash assistance.

TYPES OF JOBS AVAILABLE

Jobseekers reported that the main economic sectors currently hiring were in construction, municipal work, grocery shops (and small shops in general), and to a lesser extent transportation, cafes, cleaning and salons (four said that in their opinion, no sector was hiring). While mostly, jobseekers reported that no specific group dominated the sector, they explained that ‘municipality work’ was mostly occupied by marginalized members of the community. Jobseekers also mentioned that, while the jobs mentioned earlier represented the main economic sectors, they were mostly not desirable (only four thought that jobs in grocery shops, small businesses, construction and salons were desirable). Meanwhile, key informants also mentioned that the municipality work, which includes construction and cleaning of rubble, employs most of the people in the district (mentioned by eight key informants) followed by small businesses, manufacturing, washing and mechanics, electricity and oil sectors, restaurants and cafes. Employers reported that working hours averaged 9.1 per day. No business owner mentioned having written contracts with workers.

Average wages for skilled and unskilled workers among the businesses surveyed in Baiji district ranged from USD 200 to 1000 and USD 100 to 500, respectively. The table below provides average salaries for unskilled and skilled workers.

AREAAVERAGE SALARY

FOR SKILLED WORKERS

AVERAGE SALARY FOR UNSKILLED

WORKERS

Al-Siniya USD 307 USD 180

Markaz Baiji USD 440 USD 272

Average Baiji District

USD 390 USD 224

Consumers noted average monthly incomes of USD 356 per month.

Employers reported no preference as to which gender should fill in different positions. Women-owned businesses, on the other hand, as reported by KIIs (and confirmed by jobseekers), generally included sewing, small shops and grocery shops, crafts, private teaching, salons, agriculture and poultry in rural areas, and governmental jobs. KIIs reported that these jobs were mostly profitable. Women-owned businesses, as reported by jobseekers, earned on average USD 96 per month (though many did not know).

SKILLS GAPS

Workshop participants in Al-Asry noted many workshops had the potential to expand, such as PVC, smithery, carpentry, ice factory, water factories and car services; these were also reported as skills perceived as desirable among youth. Sewing was suggested for women by the workshop’s participants, and women said they wanted to acquire these skills. In Al-Siniya, PVC, smithery, carpentry, plumbing and car services were noted as being in demand, sought after by youth as skills to be learned. For women, in addition to sewing, hair and beauty salons were reported as being in demand, and sought after as jobs. Tailors for men were also mentioned. Such training courses are currently not available in Baiji.

Sixty-three per cent of jobseekers, on the other hand, said that grocery shops and restaurants, followed by less mentioned sub-sectors such as maintenance of electronic devices, transportation, pharmacies, butcher shops, and construction had difficulty in finding adequately trained employees. Employers mentioned cutting/installation of glass, cooking, beauty services, knitting/embroidery/sewing, and skills required in the metal sector as skills that are hard to find. Below, a table of businesses that reported difficulty in finding skilled or

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experienced workers (mentioned by half of employers) shows that most of the businesses with such difficulties represent most of the sectors surveyed, including in construction, general trade, hospitality, manufacturing, metal, and services. However, only about half among these businesses trained apprentices in the past.

BUSINESS MENTIONING DIFFICULT TO FIND EXPERIENCED WORKERS

TRAINING OF APPRENTICES

Food preparation, pickles No

Barbering/salon/beauty centre No

Manufacturing (metal, PVC, aluminum) (3)

Yes (2 of out 3)

General trade in construction (2) Yes (1 in 2)

Restaurants (2) Yes (1 in 2)

Metal (smithery and welding) (2) Yes (1 in 2)

Glass installation Yes

Manufacturing of blocks Yes

Chemical products retailers Yes

Knitting/sewing/weaving Yes

Table 3. Businesses reporting challenges in identifying skilled workers

and their experience in training of apprentices

Tools and assets most commonly requested by businesses included generators followed by rehabilitation of workshop and equipment such as ovens, welding machines and wood cutters. A respondent mentioned soft skills were needed, such as honesty and integrity. Business owners were also asked what they would do were they to receive a cash grant (in an open-ended question); only 17 per cent mentioned hiring new employees, with the most common response being buying additional machinery and similar. Some employers might have implied the desire to hire new workers when mentioning the expansion of their business in general.

RECRUITMENT MECHANISMS

While jobseekers did not know of a job centre( except for two, who mentioned the Local Council and one who mentioned a Directorate in Al-Siniya), they suggested that job centre services could be offered in the City Centre (referring to the district centre) and some also mentioned the market, although two women specified that it should be ‘away from the market’ to provide easier access, specifically for women. Most employers reported hiring through ‘connections’ and word of mouth. Half of employers were open to recruiting through more formal channels but others expressed some doubts related to trust,

quality of such services in providing skilled workers, and the need to employ relatives who do not have jobs. The area is prone to labour migration, with all respondents mentioning that people tend to migrate for economic reasons outside of the community, mostly to Tikrit and Baghdad – and to a lesser extent, to other parts of Iraq (the latter applies to men only).

SUPPLY-SIDE BOTTLENECKS

The most common challenge facing employers was related to municipality services such as electricity and/or water (reported by 40% of business owners), followed by a variety of issues such as poor returns, lack of a youth training centre, poor demand, and a low purchasing power among people. Seventy-three per cent of business owners reported having multiple potential suppliers for their raw materials, whereas 93 per cent reported being able to respond to an increase in demand. Those who reported not being able to respond to an increase in demand included a respondent from the PVC and the metal sector and another from a smithery. Employers who did not purchase raw materials locally (43%) mostly did not specify the reason and five of them (or 17% of all employers) mentioned that they did not because local prices were more expensive.

DEMAND-SIDE BOTTLENECKS

Challenges in dealing with clients included mostly indebtedness and delayed payments, which were reported by the vast majority of respondents. Only 17 per cent of employers reported they had good demand for their products, with the vast majority reporting average demand and an average salary at USD 308, which is higher than for those who reported good demand. Only 7 per cent reported poor demand.

GOOD DEMAND POOR DEMAND

17% 7%

Car wash Supermarket

Chemical products retailer Welding

Restaurant

Metal, PVC, aluminum (2)

Average salary: USD 268 Average salary: USD 193

Examining salaries by business in detail, the highest salaries are mostly found in construction, manufacturing, general trade of pharmaceuticals and chemicals, and food (bread, pastries but also a restaurant and cafeteria). Manufacturing, mostly in PVC and aluminum, have among the lowest salaries.

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Fig.1 Average salary – skilled workers

An attractiveness matrix can be applied to measure and contrast the varying measures of demand as reported by local businesses – and compare them to the salaries these businesses reported paying their skilled workers – to get a better understanding of what types of jobs could be sustainable and decently remunerated. Looking into businesses reporting

average demand and paying high salaries (or salaries above the average of all salaries), the manufacturing, construction, food, hospitality, and a pharmacy sectors score high. Higher salaries and high demand include general trade with chemical products. Manufacturing is also present among lower salaries.

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POT

ENT

IAL

FOR

IM

PAC

T

Poor Demand Average Demand High Demand

Higher Salaries

/

Manufacturing (3) – Carpentry, PVC/Aluminum, Tank factory

Construction (2) – Glass installation,

Block manufacturing

Food (2) – Pastry, sweets, bread

Hospitality (2) – Cafeteria, Restaurants

General Trade - Pharmacy

General trade - chemical products

Lower Salaries

Metal – Smithery, welding

General trade (2) – Grocery shops, Construction

Manufacturing (3) – PVC/Aluminum, Carpentry

Hospitality – Restaurant

Services – Hairdresser/beautician, Knitting/sewing

Metal (2) – PVC/Aluminum, Smithery

Services – Car wash

Hospitality – Restaurant

POTENTIAL FOR GROWTH

Table 4. Cross-tabulation demand and salaries paid to skilled workers

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CONCLUSIONSIn Baiji, the EDF has potential for expanding many small and but also many medium sized businesses, which could also absorb more youth and IDPs into the workforce. Most jobseekers mentioned a preference to own their business; therefore, exploring BSP for those wishing to enter services such as mechanics, beauty/hairdressing salons, and others are recommended. Multisectoral workshops also reported that there are many businesses and vacant shops and a general desire to restart small businesses, which require financial support.

Because there are no written contracts between employers and employees, and workers do long hours, IOM has an opportunity to improve the formality of work through the EDF. Since people do not have savings, CFW targeting community priorities such as health, education, waste management and other municipal work would greatly benefit the communities of Baiji.

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Written and designed by:The International Organization for Migration — Iraq Mission

© IOM Iraq 2020

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LABOUR MARKET OPPORTUNITIES AND

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