Romania’s workforce shortage eases to 4-year low on record hiring of foreign workers

Sorin Melenciuc 19/08/2019 | 12:13

Romania’s workforce shortage reaches this year a 4-year low level as the number of foreign workers hits an all-time high, official data suggest.

In the second quarter of 2019, Romania’s job vacancy rate declined by 0.14 percentage point year-on-year, to 1.11 percent, the lowest level since Q2 2015, but some sectors are much more affected than others, National Institute of Statistics (INS) data show.

Compared with the previous quarter, the job vacancy rate declined by 0.07 percentage point. The number of unoccupied jobs decreased by 6,460 year-on-year, to 54,983 in Q2 2019.

Foreign workers

This trend may be associated with the record hiring of foreign workers in Romania this year.

The Romanian government has recently increased quotas for non-EU foreign workers in 2019 by 50 percent up to 30,000 work permits, an all-time high number, as there is higher demand from local companies claiming they are affected by the workforce crisis.

In the first half of this year, around 11,000 work permits for non-EU foreign workers were issued in Romania, but the demand from employers is much higher, according to official data.

The impressive economic growth Romania has been experiencing during the last few years has put increasing pressure on employers to find skilled workers in order to expand their businesses but the latest official data show that Romania is far from being considered to be in a severe “workforce crisis” situation.

Moreover, the economic growth has slowed down last year to 4.1 percent, from 7 percent in 2017. Experts warn that GDP growth rate could slow down to less than 3 percent this year, limiting job creation despite higher wages.

According to official data, workforce shortage in the private sector is concentrated in some areas like services (2.4 percent job vacancy rate in Q2 2019), transport (1.4 percent) and IT (1.5 percent), a consequence of the fact that much of the economic growth in Romania is the product of a consumer bonanza, stimulated by years of wage-led growth government policy.

But the real labor shortage is currently experienced in EU by the advanced economies, with sophisticated structures and high wages.

Among the EU member states, the highest job vacancy rates are registered in the Czech Republic, Belgium and Germany.

In fact, Romania ranks among the EU member states with low job vacancy rates despite claims of widespread workforce crisis.

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