Workforce shortage causes losses in turnover and profit for most companies

Aurel Dragan 19/03/2019 | 12:28

The lack of specialists and the labor shortage in the market are part of the discourse of most companies in Romania, but the direct costs generated by this situation are rarely discussed. Failure to find and recruit the right employee in time not only leads to increased pressure on other employees but also to the loss of important contracts with certain clients, stagnation or reduction of productivity, and restrictions in the company’s activity. For these reasons, nearly seven out of ten employers say they have had lower profits and turnover, according to the latest survey by BestJobs.

44 percent of the survey respondents showed that the lack of sufficient or adequate workforce affected up to 10 percent of the company’s annual profit, another 15 percent said the impact was even higher, up to 20 percent, and 8 percent even exceeded 20 percent. At the same time, two out of five employers claim that turnover has fallen by up to 10 percent, while 17.8 percent say the drop was up to 20 percent and 8 percent said it was up to 30 percent. About one-third of respondents said they were not affected in this respect.

How companies filled their employee deficit

To offset the employee shortage, about a third of employers recruited non-specialist people into the required field, but trained them internally. Another 13.6 percent hired more students or converted some of the employees professionally to cover the area where specialists lacked, according to the answers provided by 13.1 percent of employers. At the same time, for 11.4 percent, the solution was to hire more people from around the world, who commute daily. Nearly 9 percent have invested more in technology to replace the human resource. Fewer are those who have to employ retired people or resort to workforce outside the country.

In order of relevance of responses, the most difficult are employees in the fields of production, sales, IT, engineering, logistics, financial accounting and customer service. The most difficult recruitment experience is mid-level (52.5 percent of respondents), entry-level (27.7 percent), senior level (19.8 percent). The vast majority of employers are able to recruit the right employee within two months of job announcement. In some situations, however, finding the right candidate for a certain post from the time of launching the recruitment announcement can take between two and three months, said 13 percent of the respondents, and 10 percent said it could take even three to six months.

More than half of the employers (53.5 percent) say that the main reason why they are unable to take up the available positions in the company in a timely manner is that the potential employees, especially the young ones, have too much expectations in relation to their abilities / their specializations. Almost one third asserts that there are not enough human resources specialized in the market, and 11 percent fail to cope with competitors, which offer more generous packages of wage and extra-wage benefits.

Regarding the employment deficit at the market level, most respondents (33 percent) believe that the main cause is the lack of interest from the inactive workforce to qualify. Another 25.7 percent think that the main reason is the too low wages that can be offered by employers. Other causes are the emigration of specialists (24 percent), but also the closure of vocational schools (12 percent).

Eight out of ten employers had up to ten vacancies at the time of the survey, half of which needed one to five employees per job. Most of the available positions were in the sales, production, engineering, administrative, financial-accounting, IT and logistics departments.

The BestJobs survey was conducted between February 15 and March 15 on a sample of 382 small and medium sized and large companies in Romania.

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