Employers need to show flexibility on tough market

The new government has made a commitment to create 1 million new jobs in Romania, in line with European directives that stipulate certain targets for member states. Pundits at the Business Review event Focus on Employment discussed relevant issues such as changes to the legal framework, taxation, temporary work and layoffs.

Otilia Haraga

In looking at the 1 million figure, one must take into consideration that this government has “a limited term but a great deal of obligations,” said Iolanda Staniloiu, spokesperson for the Ministry of Labor, adding that the new executive must also respect the pledges Romania took before financial institutions. “There cannot be a huge amount of changes during this short term of six months. This is why making very big promises would be irresponsible.”

As for the ministry of which she spoke on behalf, Staniloiu said it has experienced “one of the highest turnovers of ministers of all and this has made its mark on its policies.”

Under the strategy Europe 2020 to which Romania has signed up, the country must reach an employment rate of 65 percent in 2013, and 70 percent in 2020.

To reach this target, the Ministry of Labor is working on a national plan for jobs. A first draft has already reached the ministry, and in a relatively short time span – it could be a week or a month – it will be put up for public debate, said Staniloiu.

Pundits present at the Focus on Employment event agreed that the labor market will suffer various changes ranging from the modifications that will be made to the Labor Code to the way Romanians view the concept of temporary work.

Temporary measures

According to Irina Petrescu, lawyer at GI Group, temporary work has been seen locally as the leasing of personnel. Moreover, she added, it is also confused with contracts that are signed for a limited timeframe.

“Romanians must change their mentalities when it comes to temporary work. Most employees want to sign an indefinite work contract,” said Petrescu. In other countries, temporary work is very widely used, since it is an instrument that is much more flexible and beneficial for the employer. “In the United States, the mentality is totally different: today you work in one place, tomorrow in another.”

France is another of the countries that make extensive use of temporary work, according to Marilena Balabuti, chief officer in the legislation department at the Territorial Labor Inspectorate (ITM) Bucharest.

The Labor Code bends to the view of the Romanian employee and stipulates the possibility of indefinite work contracts between the prospective employee and temporary work agents. The banking sector is the field that makes the greatest use of temps. However, paradoxically, there were voices at the event that complained that temporary employees find it harder to secure a bank loan.

One of the reasons for the banks’ reticence is that “since 2003, the banking system has seen the highest growth rate of fraud in history,” said Andrei Brasoveanu, managing partner at Ciurtin Brasoveanu & Partners. “For this reason, no bank will consider a contract as sufficient proof; they will ask for additional documents.”

The annual growth in the amount of work-related litigation over the past three years has been 15-20 percent, said Brasoveanu.

He rejected the rumors on the market that when employees take action against their employers in a court of law, they always win as “mere myth.” “From my personal experience, I can say the success rate of employees who sue their

employers is 60 percent. This only goes to show that 40 percent of employers make redundancies without being sufficiently prepared and cautious enough to respect the law,” added Brasoveanu.

He said the Labor Code spelt out all the necessary steps an employer must take when making people redundant.

Some of the most frequent mistakes bosses make include not communicating the layoff decision to the employee, not informing the employees of the essential conditions of the labor contract, not mentioning that employees have the right to contest the decision in court, not respecting the legal notice period or the terms of the collective layoff procedure and others.

The domains that offer the most opportunities for retraining include agriculture, following the back-to-basics trend, says Mirela Iordan, human resources director at Pfizer Romania. However, it is also true that the top management in companies is not very open to hiring retrained personnel since they seek specialized and experienced workers. Meanwhile, an employee who starts a job in a new field sometimes recalibrates his or her salary package.

Work in Romania is taxed at a rather high level, this is why some companies prefer to use PFA (sole trader) contracts or civil contracts, said Mitel Spataru, tax manager at FinExpert. However, in some situations this is risky, so he urged employers to pay close attention and make sure these types of contracts are appropriate for the respective work relation.

Stanton Chase survey: Profitability – best way to rate top sales execs

Responsiveness to and the ability to keep up with the fast changing demands of the marketplace are the top priorities of sales executives at the moment, according to a national sales survey for 2012 released by Stanton Chase during the Business Review Focus on Employment event last week. More than 210 senior executives across all sectors responded to the questionnaire, regarding the conditions and challenges in this volatile job market.

The survey, entitled The Employment Reality for Sales Executives in Romania, indicates that top executives in this domain feel they have been most affected in recent years by competition pressures (in 34 percent of cases), globalization of the supply chain (23 percent) and globalization of the consumer market (23 percent), while saying they were least affected by technological advancement (20 percent).

Furthermore, respondents to the survey feel the effectiveness of a top sales executive can be measured by his or her degree of profitability (25 percent), the sales alignment with the business strategy (23 percent) and customer satisfaction (22 percent), and to a lesser extent by revenues (12 percent) and the increase of sales (11 percent).

In order for a top sales executive to be successful, he or she must have, first of all, strategic and customer orientation, while attributes such as results orientation and strong product background plus marketing comprehension and previous experience are deemed less important.

The must-have qualities a top sales executive should posses in order to achieve success are superior communication, listening and negotiation skills (as indicated by 27 percent of respondents), confidence, commitment and ability to work in high-pressure situations (21 percent) and margin control best mix for business and consumer (20 percent). Complementary qualities such as attention to detail, a commercial approach and emotional intelligence were cited by 14 percent of respondents.

Shortage of talent in sales is most obvious when firms are seeking to fill customer relationship management positions (18 percent of cases), category management (17 percent) and key account management (16 percent). Next come positions in logistics/supply chain (13 percent) and customer service (13 percent) as well as trade marketing (12 percent) and export sales (10 percent).What the top management of an organization values the most in salespeople is the ability to increase sales (27 percent) and ensure high margins (25 percent).

Things such as developing a portfolio of value-added products and services (14 percent), expanding the customer base (14 percent), ensuring targeted leadership of the sales team (13 percent) and attracting the right talent (6 percent) are considered secondary. Organizations seek leadership, integrity, planning and organizing from their top sales executives.

To conclude, most top sales executives are somewhat optimistic when it comes to employment prospects over the next year (58 percent of cases) while 32 percent are optimistic and 10 percent are not at all optimistic. Furthermore, 52 percent of respondents feel their role will be strengthened in the current financial climate, 32 percent believe it will not be affected and only 16 percent think it will be weakened.

Some 42 percent of respondents expect Romania to see the first signs of economic recovery in 12 months while 35 percent believe it will come over the next 24 months.

otilia.haraga@business-review.ro

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