Serbia’s labour market is recording both relatively high employment and persistent shortages of workers with the skills required by employers, highlighting a mismatch between education, location and business demand.
The employment rate stood at 50.7% in the first quarter of 2026, while youth unemployment reached 23.1%. Registered employment then declined by 14,163 people year over year in the second quarter, even as companies continued reporting difficulties recruiting workers in manufacturing, construction, healthcare, technology and skilled trades.
The imbalance is not simply a question of how many people are available for work. A vacant maintenance-technician position in one city cannot necessarily be filled by an unemployed graduate elsewhere. Likewise, a university qualification does not automatically provide the practical capabilities required by an automated factory or an internationally focused software company.
Education system struggles to match labour-market requirements
The European Commission’s 2025 Serbia report found that the quality of education and training remained insufficiently aligned with labour-market needs. Public spending on education amounted to 3.2% of GDP in 2023, below the EU average. There has nevertheless been measurable progress among people entering employment after education. The employment rate for recent graduates reached 73.1% in 2024, an increase of 11 percentage points over five years.
Vocational education is becoming increasingly relevant as employers face shortages in technical occupations. Training programmes, however, need to provide technical foundations that remain applicable as industrial equipment, software and workplace requirements evolve, rather than functioning solely as pipelines into current low-cost occupations. The same challenge applies to retraining for an economy increasingly affected by artificial intelligence. Universities cannot provide the entire response on their own. Employers have current operational expertise, schools provide educational foundations, private providers can adapt programmes more quickly, while government can support access to training and establish standards.
Workforce retention extends beyond salaries
Serbia also faces the challenge of retaining skilled professionals who can seek employment abroad. Compensation is one factor, but career progression, institutional trust, management quality and public services also influence decisions about where professionals build their careers. Salary subsidies therefore cannot permanently compensate for shortcomings in working environments. The ability to retain talent is linked to the broader conditions under which professionals develop their careers.
At the same time, Serbia’s private education market is expanding across language schools, technology academies, executive training and international schools.
Private education expands alongside retraining demand
Competition in private education is expected to favour providers capable of demonstrating employment and learning outcomes. Certificates and branding alone do not establish the value of a training programme. The labour-market challenge therefore extends across the entire education and employment cycle. Serbia needs mechanisms connecting initial schooling with first employment, subsequent retraining, management development and transitions later in a person’s career. The resulting business opportunity extends beyond one-time education. It encompasses services that help workers maintain and develop economically relevant skills throughout their working lives.
