#FUTUREOFWORK | Coronavirus outbreak reshapes local workforce market

The world has changed more in the past two months than it had done in decades, as the Covid-19 outbreak has forced countries to close their borders and led companies to take crucial business decisions. Business Review talked to several local HR specialists and found out how this crisis will reshape Romania’s workforce market.

By Anda Sebesi

The outbreak of the Covid-19 pandemic forced every employer in Romania to make quick decisions in order to reduce the negative impact on their businesses and employees as much as possible and to be able to continue their operations. According to an HR Barometer conducted by PwC Romania between March 11-13, 58 percent of the companies included in the study implemented the work from home system solely for those employees who can work remotely while 25 percent did this for all their employees. “The work from home system has two major implications: technology and culture. Fortunately, digital infrastructure is the only aspect of digitalization where Romania is highly advanced. Our internet speed is among the best in Europe and so far it has been coping very well with the myriad of video calls and conferences,” says Oana Munteanu, senior manager of people and organisation at PwC Romania.

Oana Munteanu, senior manager of people and organisation at PwC Romania

Calin Stefanescu, the CEO and co-founder of Dora by Happy Recruiter, shares the same opinion and says that internet speed is a big advantage from this perspective and we have no other choice but to be prepared for remote work. “This is the only valid option now. It will be difficult because some employees will leverage the fact that they’re working from home while some companies which will not be able to mobilise themselves will feel the effects of the crisis more intensively. But I think that all companies should understand that this is how things stand now and their only way is to find a solution,” he says.

In addition, Munteanu of PwC warns that at a micro level, the tools that companies have at their disposal to make virtual work possible are crucial. According to her, multinationals and software companies are among the best prepared for virtual work, as in recent years they have invested in apps and infrastructure that allow them to implement remote work.

“In order to reduce the stress on technology, some companies have adopted shift work or even limited the number of virtual conferences in certain time slots, so that they can avoid overloading the system during busy hours. Other companies have overstrained their IT departments, but fortunately, the current offer for tools is huge and costs are affordable,” says Munteanu.

The culture is another significant aspect. “When working remotely using virtual tools, we all face major challenges because few have worked exclusively remotely so far. The highest pressure is on line managers who have to make sure that their teams have normal and equal workloads and that they give feedback in an effective manner,” she adds. Furthermore, Stefanescu of Dora by Happy Recruiter agrees that working from home involves a cultural component that is specific to our country, which is relatively uniform compared to large western countries which have a diverse immigrant population. “This could be an advantage for Romania in the sense of uniformity, homogeneity, and effective communication, especially in the work from home paradigm which requires better organisation and more precise communication. There will be fewer cultural and linguistic barriers,” he argues.

Catalin Roman, Senior Associate, Employment & Pensions Practice Coordinator at Noerr, points out that according to Euromonitor stats, 52.9 percent of Romanian households have laptops, which means that our country is much better positioned than other European ones from this perspective. “Remote work for a longer period could be functional if there is effective control over the employee. This means they will be checked during working hours and they will fill out an activity report each day,” says Roman of Noerr.

Last but not least, Sorina Donisa, CEO at APT Prohuman, says that companies that already had implemented the work from home system are prepared, from the infrastructure and set-up points of view, to continue this process for a longer period of time. “In addition, their employees are used to the teleworking system, which is a positive factor for the continuity of their activity,” says Donisa.

Correlation between workforce and economic competitiveness in the next year

“It is very difficult to make predictions for this year, but the current crisis will eventually pass. We think that the dynamic of the market will change significantly and the companies that do survive will certainly take protective measures. It is likely that they will hire fewer employees and use more technology. Coronavirus brings an opportunity that offers both companies and candidates time to calmly analyse their activities and how they could be transformed. Now is a right time for many companies to think of long-term solutions in order to successfully cope with future disruptive events such as the current crisis and automatise a part of their business. We are likely to see systemic changes in the way businesses operate. A major focus will be on automatic processes, which will allow them to achieve results with limited human interaction, whereas employees will only be involved in essential operations.”

Calin Stefanescu, CEO and co-founder of Dora by Happy Recruiter

The impact will be huge

The local economy is already facing the negative impact of the Covid-19 pandemic, with transportation, hospitality, and tourism being among the most impacted sectors in Romania. In addition, large automakers which are major contributors to the local GDP have already either opted for furlough or adjusted their operations towards the production of medical equipment needed to address the current health crisis. “The negative effects will be transferred gradually onto other sectors because all industries are interconnected,” says Ionut Sas, Partner, People and Organisation Leader at PwC Romania. He adds that both companies and local authorities need to think of a plan to support the private sector and secure the jobs and incomes of both companies and people. “In the meantime, there are sectors where demand has increased as a result of the crisis, like food retail, online shopping, pharmacies, medical services, telecommunications, technology, and online entertainment. However, the ripple effect of the drop in consumption and the constraints on resources as a result of closed borders will affect every activity. Yet it could generate new areas of innovation,” says Sas. Roman of Noerr says that sectors like IT, delivery, and medical equipment manufacturing are favoured in the current context. “The biggest impact is likely to be visible starting April and will continue during the summer,” Roman adds.

Technology lends a hand to the human race

Stefanescu of Dora by Happy Recruiter says that technology is definitely a strong ally in this context, supporting and making the recruitment process possible. “Dora is now communicating with tens of thousands of candidates, a thing that would be very difficult for professionals to do right now. It keeps in touch with candidates and it is the first to learn about their concerns, whether they’ve started to look for a job and the fields they are interested in,” he says. Stefanescu adds that Dora currently conducts recruitment for companies which are now on a growth path and are looking to hire or replace employees. In addition, the robot develops employer brand awareness campaigns for those firms that don’t intend to hire personnel in the next period.

In a similar vein, Donisa of APT Prohuman says that there are unfortunately few open or pending positions now, and the majority of job openings are frozen. “Everyone is now waiting to see the next developments. Many companies have decided not to continue employment contracts on a determined period or to suspend and discontinue them because they are no longer able to pay salaries as a result of the drop in volumes or a freeze in operations ,” she says.

In addition, Sas of PwC Romania says that in the next period, the recruitment process will no longer have the same importance and volume as it did prior to the Covid-19 outbreak, because most companies have suspended or postponed new staffing. “Things will be different for other processes that will rely much more on technology, like trainings or personnel evaluations. According to the HR Technology survey, the adoption of technologies by employees will be the real challenge. The positive side is that this crisis could anticipate this process. In addition, in their need to survive, businesses could generate new innovative solutions within a very short time.”

Ionut Sas, Partner, People and Organisation Leader at PwC Romania

Higher costs for workforce absorption

As Sas says, it is very difficult to estimate the costs of the current crisis for the local labour market, at a time when all companies intend to keep their employees and uphold operations. We all know that layoffs are a likely scenario despite all the efforts being made to avoid them. “It mainly depends on how the government cooperates with the business environment in this direction. Unfortunately, 2020 caught Romania off guard regarding its budgetary burden, which limits the country’s ability to support the private sector. Apart from the government’s openness to communicating and finding specific solutions for each industry, it is important to have balance across all employee categories. If the preservation of salaries and jobs in the public sector will be done at the expense of the private sector, then the recent distortions on the labour market will deepen,” says Sas. But Calin Stefanescu sees an opportunity on the local labour market considering the large number of Romanians who have come back home or are about to return in the next period. “Companies in Romania now have the opportunity to access potential employees who have been abroad until now. With a proper approach and offering, they could convince some of them to stay in Romania after the crisis passes. The window of time is not very large. We’re talking about a few months, so now it is time for companies to act,” says the representative of Dora by Happy Recruiter. Last but least, while until recently there had been a lack of candidates on the market, the situation has changed completely, as candidates are now unable to find jobs. “Romania will post a high unemployment rate because the absorption of new workforce will no longer be as big as the number of candidates available on the market,” Donisa says.