FIRM-LEVEL HIRING DIFFICULTIES IN MANUFACTURING SMEs: THE ROLE OF WORKFORCE MIGRATION, FIRM CHARACTERISTICS, AND GROWTH EXPECTATIONS

Skilled workforce shortages pose a significant challenge to the growth and development of small and medium-sized enterprises (SMEs), particularly in transition economies like Kosovo. This study examines the impact of workforce migration, firm characteristics, and growth expectations on hiring difficulties faced by manufacturing SMEs. Using a probit binary choice model, the research explores how employee migration, firm growth ambitions, and training practices affect the likelihood of firms encountering difficulties in filling vacancies for skilled labor. Data from a sample of 217 randomly selected manufacturing firms in Kosovo, drawn from the Database of Active Taxpayers, forms the basis of the analysis. The findings reveal that firms experiencing employee migration and those with growth ambitions are more likely to struggle with recruitment, particularly when investing in employee training. Conversely, exporting firms report fewer hiring challenges. The study offers several managerial and policy recommendations to mitigate skills shortages and improve recruitment outcomes in Kosovo's SMEs.