BR SPECIAL. How companies in Romania hire and keep talents and how they cope with the digitalization of local workforce

Newsroom 08/05/2019 | 14:59

Financial benefits are no longer the main pillar of an HR strategy, in Romania or worldwide. In the light of an increasingly competitive labour market, employers need to find new ways to attract and retain the best people. The challenge of the digitalization of jobs is increasing locally too, with both employers and employees needing to adapt fast to the new context. BR sat down with some of the most dynamic employers in terms of hiring in the last year and found out their strategies to hire and keep talents and how they are coping with the digitalization of the local workforce.

By Anda Sebesi

According to National Institute of Statistics (INS) data, Romania’s average net monthly earnings rose by 17.9 percent year-on-year in February, to RON 2,933 (EUR 617). The highest wage increases were found in the public sector, while most private sector employees earned less during the first two months of this year compared with December, employers in Romania often pay end-year bonuses.

In addition, the highest net monthly earnings in February were recorded in the IT sector (RON 6,683 or EUR 1,407), while the lowest were found in the textile industry (RON 1,728, or EUR 364). And the total number of employees in Bucharest reached over 1 million at the end of November 2018, up from 993,740 in the same period of 2017, according to the source.

Romania still has the second lowest average wage among European Union member states, after Bulgaria. However, following rapid pay hikes over the last couple of years, Romania is now close to Hungary and Latvia in terms of average net earnings.

Last but not least, the total amount of wages paid by Romanian bosses rose by 17 percent in 2018 compared with 2017, to EUR 80.3 billion – an all-time high, mainly due to minimum wage and public sector pay increases. The wage bill registered in 2018 is equivalent to 39.8 percent of GDP, much lower than the EU average of 47.7 percent of GDP. A recent BR analysis found that the highest wages in Romania are in Bucharest and four counties (Cluj, Sibiu, Ilfov and Timis), exceeding EUR 600 per month on average, while in almost half of the country, average net earnings are below EUR 500. But many economists expect wage hikes to slow down in 2019, due to fiscal constraints.

Employers focus on retention in a hot labour market

Continuous learning for skill development, leadership development and improving the employee experience are the most important and pressing trends identified by the Deloitte 2019 Global Human Capital Trends report for Romania.

“The main concerns of Romanian employers are lifelong learning (90 percent of respondents) and developing leaders (84 percent), followed by improving the employee experience (78 percent). These results reflect the current challenges facing Romanian organizations: retention in a hot labour market and growing the right leaders to ensure such retention and bring businesses forward.  Lifelong learning has evolved from a matter of career advancement to labour market survival in the context of the need to sustain longer careers and as part of the fact that every job is changing,” said Raluca Bontas, partner global employer services, Deloitte Romania.

Developing leaders seems a perennial issue of our time, as this topic has been highlighted as one of the most relevant by the Global Human Capital Trends study since its 2013 edition. Some 75 percent of the global respondents believe leaders need to understand new technologies in order to be effective. Also, respondents consider the leadership development programs currently in place essentially ineffective.

As far as the employee experience is concerned, organizations may reach specific objectives in this area by adopting a human focus, capturing the meaning of work that people are looking for, highlighting the impact the work has both on the organization and society as a whole, and ensuring effective leadership, underlines the report.

Looking at rewards, the report underlines that this means more than money and organizations need to enhance the use of personalized reward systems as key to retain employees longer and keep them productive, such as flexible composition of pay, professional and personal development opportunities, and meaningful jobs. Some 63 percent of the local respondents consider this topic important or very important. In 2018, making rewards personal was also indicated as a very important topic on the HR agenda, together with well-being, as a driver for productivity.

Granting equity in the company increases loyalty

The long-term incentive plan known as a Stock Option Plan, based on which an employer grants equity in the company to its key employees, under certain conditions, is more favorable from a tax perspective than similar plans implemented in other countries in Central and Eastern Europe, according to Deloitte Romania analysis. Besides Romania, the analysis covers eight other countries in the region, namely Hungary, Poland, Czech Republic, Slovakia, Bulgaria, Croatia, Serbia and Latvia.

“Granting company shares is a remuneration method based on which the employer connects the individual performance of top management employees with the business performance, generating increased loyalty and, at the same time, additional motivation. Even though the tax regime for such an instrument is definitely more favorable than usual salary elements, when deciding on whether the company should implement such an instrument, the employer should focus on the company’s growth strategy and the need to co-engage the employees in achieving it,” noted Bontas of  Deloitte Romania.

Tax incentives are the main benefits for equity plans (more specifically, the Stock Option Plan), since taxation is triggered when the employee sells the shares and thus obtains a capital gain, and not when he or she actually receives them, as in the case of other types of benefits.

“The Stock Option Plan has two important elements: correlation between the remuneration received and the increase of the employer’s share value and, subsequently, the employee’s retention for a longer period, either to benefit from a higher value of the shares or to obtain the associated dividends,” said Elena Raileanu, manager, global employer services, Deloitte Romania.

What professionals say about the local market


“In general, on the labour market we can say that there is a distance between employers’ offers and the expectations of the new generation of candidates. From the perspective of the construction market, as we are facing an increased gap in the supply and demand of qualified workforce, we are intensifying our efforts to support excellence in execution, by providing partners with a series of programs to train future construction specialists through the Saint-Gobain Technical Academy.”


“The industry of services for the business sector has become one of the most dynamic sectors in Romania. Its potential is about several hundred thousand employees, while the industry has reached just half of it.”


“As in many other cases, in the hospitality industry there is an imbalance between the available workforce and the available skills. Hospitality is one of those industries where one can easily find a starting point and build a career, either locally or abroad.”


“The lack of workforce is already a certainty, more so as the emigration phenomenon has increased in recent years. Fortunately, the workforce crisis in the IT sector is not felt as stronly as it is in the public space. The fact that we are working with emerging technologies is an advantage for us in attracting workfroce, especially because from this perspective there is no overlap with the offers coming from the public sector.”


OPINION: Finding the right candidate

Adrian Cernat, CEO and co-founder of SmartDreamers  

Odds are, the perfect candidate for your latest open position is already out there, working for a different company. Luckily, there’s a good chance that any given candidate can be convinced to adjust course and switch to a position at your company – if you can offer something that her current employer doesn’t. This might be more prestige, better pay, more opportunity for advancement, a better location, or any of the other elements that traditionally make up a strong EVP (employee value proposition). If you really are a good fit for one another, the biggest obstacle standing between you and your ideal hire is awareness. If she doesn’t know you exist, or doesn’t immediately associate your business with your employer brand, then how will she make her way into your applicant funnel?

Since your ideal employee isn’t actively seeking your company out, you need to go to them. This means avoiding places like Craigslist and Indeed that are only frequented by active job seekers. Instead, it’s time to focus your energies on the sites where candidates already spend their time online: Facebook, Twitter, Snapchat, YouTube, Reddit, etc. Again, it’s not enough to have accounts on these platforms that people can seek out (though you probably should have not just corporate accounts but separate career-focused accounts), you have to leverage paid posts and targeted advertisements to make sure that when your ideal job candidates are thinking about seeing what’s out there, they’ve heard of your company. Not just heard of it, but learned to associate it with all of the unique and exciting ways that your company provides growth opportunities, learning, and benefits to its employees.


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