LABOUR MARKET OPPORTUNITIES AND CHALLENGES Shuhada LMA.pdf · 2020. 7. 29. · BSP Business Support...

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

Al-Shuhada, Fallujah, Anbar 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

IOM Disclaimer

The opinions expressed in the report are those of the authors and do not necessarily reflect the views of the International Organization for Migration (IOM). The designations employed and the presentation of material throughout the report do not imply the expression of any opinion whatsoever on the part of IOM concerning the legal status of any country, territory, city or area, or of its authorities, or concerning its frontiers or boundaries.

IOM is committed to the principle that humane and orderly migration benefits migrants and society. As an intergovernmental organization, IOM acts with its partners in the international community to: assist in meeting the operational challenges of migration; advance understanding of migration issues; encourage social and economic development through migration; and uphold the human dignity and well-being of migrants.

© 2020 International Organization for Migration (IOM)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the publisher.

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

IOM IRAQ4

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 the neighborhood of Al-Shuhada in Fallujah from January to March of 2020.

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 focused specifically on Al-Shuhada, a neighborhood located in Fallujah.

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

KEY FINDINGS

• Most jobseekers noted a preference for owning their business (67%) suggesting a preference for entrepreneurship in the community.

• Key informants did not feel that cash support would cause inter-household and community conflict.

• While all jobseekers reported that people are not comfortable paying for goods and services in cash, all jobseekers also reported preferring cash assistance over in-kind assistance.

• Jobseekers reported that the main economic sectors in Al-Shuhada include construction (blocks), manufacturing (smithery, carpentry), trade (in general, supermarkets and grocery shops) and services (car wash, barbering, tailoring, beauty salons), and bakeries. Almost all jobseekers thought these jobs were desirable and that no specific group dominated these jobs.

• Employers reported paying their skilled workers 360 Unites States dollars (USD) and their unskilled workers USD 288.

• Women-owned businesses generally include beauty salons, fast food preparation, tailoring, livestock and agriculture, and gyms; they were noted to be mostly profitable. Almost all consumers also reported that women do not contribute to household income.

• Workshop participants noted that tailoring and food preparation skills are required for women. Languages, computer proficiency, literacy, business skills, and ‘crafts’ (likely referring to welders, plumbers, mechanics) were reported as needed. No courses were noted to be available in the community.

• Jobseekers mentioned that the manufacturing sector had difficulties in finding adequately trained employees.

• Employers, also asked about skills, mentioned that technical skills were difficult to find (mentioned by one employer). In addition, one mechanics and one car painting business said they had difficulties in finding adequately trained employees.

• More than half of employers have experience in providing apprenticeships and these included businesses in mechanics services, car painting, car wash, car tuning, electronic devices repair, construction tools and materials, a blacksmith, marketing, carpentry, detergent production, and a restaurant.

• While jobseekers did not know about a job centre, they suggested that job centre services could be offered in the city centre, while a smaller number mentioned it could be anywhere close to their respective communities.

• Most employers reported personal connections and word of mouth as their main hiring mechanism.

• Sixty per cent of business owners reported having multiple potential suppliers for their raw materials, whereas almost all reported being able to respond to an increase in demand.

• Looking into businesses self-reporting high demand and paying high salaries (or salaries above the average of all salaries), the automotive sector scored high. Businesses self-reporting average demand and paying higher salaries include construction (4), a bakery, a blacksmith, car turning, carpentry and a restaurant.

IOM IRAQ 5


Recommendations

SECTORS TO TARGETAgriculture/livestock, trade, construction (cement factories), food processing, smithery, carpentry, PVC

SECTORS TO AVOID N/A

ACTIVITIES TO TARGET

• Business support packages and business expansion support packages in agricul-ture/livestock, crafts (likely meaning welders, plumbers, electricians, mechanics and others.) The list is only indicative and not exhaustive. Women’s centered businesses are also recommended for BSP/ESP, especially due to the high number of female-headed households (although these businesses were not explicitly suggested)

• On-the-job training in tailoring and food preparation for women (although these were only examples and could include other businesses typically run by women, such as beauty salons, gyms and hairdressing). Since food preparation, the auto-motive sector (car washing, tuning, mechanics, car painting), and manufacturing (blacksmiths and carpenters) reported some average/high demand and some higher salaries, these might be appropriate for OJT (for men)

• Vocational training in business skills, computer skills, literacy and vocational training in general or ‘crafts’ (welding, plumbing, electrical skills, mechanics, etc.)

ACTIVITIES TO AVOID N/A

CASH FOR WORK (CFW)

Cash for work is recommended as consumers reported not having any savings and two thirds reported having debts. Based on the multistakeholder workshop, CFW could include waste removal

UNRESTRICTED CASHCash is recommended. According to Key informants, cash support would not cause community conflict and jobseekers prefer cash assistance

PROFILES TO TARGETFemale-headed households, youth, graduates, unskilled workers, internally displaced persons, returnees, older people and persons with disabilities

NOTES N/A

Table 1. Recommendations

IOM IRAQ6


STUDY INTRODUCTION

1 IOM, Displacement Tracking Matrix, 31 December 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 community of Al-Shuhada and includes interviews and a community workshop.

DISTRICT OVERVIEW

Fallujah is a district in Anbar Governorate whose capital, Fallujah city, is located roughly 65 km west of Baghdad. Most of its residents are Sunni. The population of Fallujah was estimated at about 275,000 in 2009/10. Almost 22,000 individuals were reported as displaced in Fallujah district alone as of December 2019.1

While people have access to tap water, quantity is reportedly insufficient, especially in summer. Issues with water quality were also reported, as well as poor water network coverage, which forces some households to connect illegally to the existing water network. Problems with wires and transformers were reported as the power network is overburdened because of the high number of users. Only one health centre was reported as being accessible, and it lacks medicines and equipment, among other limitations. In schools, the pupil-teacher ratio is high. Some schools do not have access to running water and others do not have windows. The market in Al-Shuhada is almost entirely destroyed and purchasing power among people is low. Workshop participants said that no one is interested in repairing the market. The major employers before the crisis included the industrial sector in general (carpentry, PVC, aluminum), cement/marble factories, trade, food processing and agriculture. Informants had mixed views on whether these businesses had recovered or not; at most, a 50 per cent recovery was estimated.

CONSUMER SPENDING SNAPSHOT

• Key weekly expenses: The typical consumer in Al-Shuhada reported spending an average of USD 107 per week on food for their household (for a household of seven members, on average).

• Key monthly expenses: 33 per cent of consumers reported having a monthly rent expense, averaging USD 188 per month; and almost all reported monthly expenses on temptation goods, such as sweets and tobacco, averaging USD 50 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 on data collection tools. Following the training, community-level workshops with youth, women and local residents were organized in January 2020, followed by KII, jobseeker, employer, and consumer surveys in February and March of 2020.

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..

IOM IRAQ 7


Key Informant Interviews

Nine KIIs were conducted with representatives of the business community from Markaz Fallujah. 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 Al-Shuhada, 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 conducted in Al-Shuhada. Seven were conducted in Nazal, two in Al-Resala, and one in Al-Moalimeen 2 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 Al-Shuhada, 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 Al-Shuhada, Fallujah.

TOOLSMALE

RESPONDENTS

FEMALE

RESPONDENTS

TOTAL NO.

OF SURVEYS

CONDUCTED

Multi-sectoral

Community Workshops

27 13 30

Key Informant Interviews

8 1 9

Jobseeker Surveys

30 0 30

Private Sector

Employer Surveys

30 0 30

Consumer Surveys

22 8 30

Table 2. Surveys Conducted in Al-Shuhada for Labour Market Analysis

IOM IRAQ8


FINDINGS

ATTITUDES TOWARDS ENTREPRENEURSHIP AND CASH

Most jobseekers noted a preference for owning their business (67%) suggesting a preference for entrepreneurship in the community. The remaining prefer employment.

Key informants did not feel that cash support would cause inter-household and community conflict. While all jobseekers reported that people are not comfortable paying for goods and services in cash, all jobseekers also reported preferring cash assistance over in-kind assistance. These findings suggest that cash support can be safely introduced to Al-Shuhada by an international organization.

TYPES OF JOBS AVAILABLE

Multisectoral workshop participants reported that a high number of youth in the community were unemployed, in addition to widows and divorced/separated women. Jobseekers reported that the main economic sectors in Al-Shuhada include construction (blocks), manufacturing (smithery, carpentry), trade (in general, supermarkets, and grocery shops) and services (car wash, barbering, tailoring, beauty salons), and bakeries. Almost all jobseekers thought these jobs were desirable and that no specific group dominated these jobs.

Key informants also mentioned similar sectors as employing most people, in addition to mosaic tiles factories, restaurants, cafes and private education. However, some of these businesses refer to other neighborhoods and not Al-Shuhada exclusively.

Employers reported that working hours averaged 8.4 hours per day. Business owners said they did not have written contracts with workers. Average wages for skilled and unskilled workers in the businesses surveyed ranged from USD 200 to 800 and from USD 150 to 500, respectively.

AVERAGE SALARY FOR SKILLED WORKERS

AVERAGE SALARY FOR UNSKILLED WORKERS

USD 360 USD 288

Consumers noted average monthly incomes of USD 335 per month.

Employers reported no preference as to which gender should fill in positions, except for one respondent, who mentioned sales. However, women-owned businesses, as reported by KIIs, generally include beauty salons, fast food preparation, tailoring, livestock and agriculture and gyms; these businesses were considered mostly profitable. Almost all consumers also reported that women do not contribute to household income.

SKILLS GAPS

Workshop participants noted that tailoring and food preparation skills are required for women. Languages, computer proficiency, literacy, business skills, and ‘crafts’ (likely referring to welders, plumbers, mechanics) were reported as needed. No such courses were noted to be available in the community.

Jobseekers (2), on the other hand, mentioned that the manufacturing sector had difficulties in finding adequately trained employees. Employers, also asked about skills, mentioned that technical skills were difficult to find in general (mentioned by one employer). In addition, one mechanic and one car painting business said they had difficulties in finding adequately trained employees.

More than half of employers have experience in providing apprenticeships, including businesses in mechanics services, car painting, car wash, car tuning, electronic devices repair, construction tools and materials sale, a blacksmith, marketing, carpentry, detergent production, and a restaurant.

Tools and assets most commonly requested by businesses included a variety of equipment/machinery to operate their business. Some also mentioned generators. Business owners were asked what they would do were they to receive a cash grant: nobody mentioned hiring new employees (in addition to a few who mentioned expanding their business in general), with the most common response being buying new machinery/equipment.

RECRUITMENT MECHANISMS

While jobseekers mostly did not know of a job centre, they suggested that job services could be offered in the city centre, while a smaller number mentioned it could be anywhere close to their respective communities. Most employers reported personal connections and word of mouth as their main hiring mechanism. Employers were not open to hiring through more formal channels and mentioned that formal channels were not efficient. Employers reported hiring mostly relatives. The area is prone to labour migration, with almost all respondents mentioning that people tend to migrate for economic reasons outside of the community, including to Fallujah city centre and Baghdad.

IOM IRAQ 9


SUPPLY-SIDE BOTTLENECKS

The most common challenge facing employers was related to debts and lack of cash (reported by 77%), followed by low purchasing power among people, poor demand and poor service availability.

Sixty per cent of business owners reported having multiple potential suppliers for their raw materials, whereas almost all reported being able to respond to an increase in demand. More than half of employers surveyed mentioned not purchasing raw materials locally, mainly due to quality issues. Only one (involved in PVC manufacturing) mentioned that local prices are higher.

DEMAND-SIDE BOTTLENECKS

Challenges in dealing with clients were related to a lack of cash, requests for services/goods requiring specific machinery/equipment to be produced (that is, not owned by the employer), and requesting payments in instalments.

Sixty-seven per cent of businesses reported having average demand and these pay USD 305 both to skilled and unskilled workers. High demand was reported by 17 per cent of businesses and these were paying their workers USD 405 per month on average. Poor demand was also reported by a similar percentage and these were paying USD 310, slightly higher than for those self-reporting average demand. The highest salaries are found among businesses with high demand.

Examining salaries of skilled workers in detail (Fig. 1), a variety of businesses pay above average salaries and it appears that construction businesses pay above average salaries and cleaning detergents businesses pay among the lowest (along a barber).

IOM IRAQ10


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 to compare them to the salaries these businesses reported paying their skilled workers – to get a better understanding of what types of jobs could be both sustainable and be decently remunerated (Table 3). Looking

into high demand with high salaries (or salaries above the average of all salaries), the automotive sector scored high. Businesses self-reporting average demand and that pay higher salaries include construction (4), a bakery, a blacksmith, car tuning, carpentry, and a restaurant.. Manufacturing is also present among lower salaries.

IOM IRAQ 11


POT

ENT

IAL

FOR

IM

PAC

T

Poor Demand Average Demand High Demand

Higher Salaries

Electronic devices maintenance

Marketing

Public smith and transportation

Construction (4), tools and materials

Bakery

Blacksmith

Car turning

Carpentry

Restaurant

Mechanic (2)

Car wash

Lower Salaries

Detergent manufacturing

Barber

Car painting

Car dealership

Home items supplier

Market

Detergent manufacturing

IT

Mechanic

Car painting

POTENTIAL FOR GROWTH

Table 3. Cross-tabulation demand and salaries paid to skilled workers

IOM IRAQ12


CONCLUSIONSIn Al-Shuhada in Fallujah, the EDF has potential for expanding many small and medium sized businesses, which could also absorb more youth, IDPs and other priority groups into the workforce. Many sectors also appear to have potential for growth and experience good/average demand and pay fairly high salaries, which could also suggest potential entry points for sustainable job creation.

Most jobseekers mentioned a preference to own their business; therefore, BSP for those wishing to enter a variety of so-called crafts (which were not specified) is recommended. Considering the high number of female-headed households, the BSP is especially important, as it would allow women to support themselves and their families, possibly through home-based businesses, which are preferable in conservative environments such as Fallujah’s. OTJ is also recommended, including for women.

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 waste removal would be beneficial too.

IOM IRAQ 13


V`

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

© IOM Iraq 2020

IOM-IRAQ MISSION

V`

LABOUR MARKET OPPORTUNITIES AND

CHALLENGES

IOM IRAQ

www.iraq.iom.int

[email protected]

International Organization for Migration The UN Migration Agency - Iraq Mission Main Office in Baghdad UNAMI Compound (Diwan 2) International Zone, Baghdad, Iraq

http://www.iraq.iom.int

LABOUR MARKET OPPORTUNITIES AND CHALLENGES Shuhada LMA.pdf · 2020. 7. 29. · BSP Business Support...

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