Employers tip their work forces to grow, new study finds

Newsroom 17/03/2008 | 15:56

According to a study conducted by Brussels-based organization European Citizen Action Service (ECAS), analyzing the impact of Bulgaria and Romania joining the EU on the free movement of people, there are more than 2.5 million Romanians currently working abroad, from a total population of 21.6 million. The construction employers' organization, for example, reported a shortage of 50 percent or 300,000 workers in 2007 and the situation will get worse in 2008, according to estimates. According to the survey of the Open Society Foundation in Romania, 11 percent of the active population would consider migrating for work purposes in the
future, which could lead to the temporary emigration of around 1.4
million Romanians in the next few years.
Labor force participation was estimated at 58.8 percent in 2006, while the unemployment rate was 6.9 percent in July 2007, according to the study. Migrants' remittances amounted to EUR 3.6 billion in 2005 and returning migrants changed a further EUR 8.9 billion into the local currency in Romania in 2005. The money transfers and the bank accounts filled with the money Romanians earned abroad was comparable with the foreign direct investments (FDI) in Romania in 2007, according to the central bank's (BNR) data, reaching EUR 7.2 billion in 2007, EUR 2 billion more than in 2006. The BNR data stated a volume of EUR 3.2 billion of foreign deposits, three times higher than in 2006. By comparison, the money brought by FDI reached an amount of EUR 7.06 billion, 22.3 percent less than in 2006.
But analysts are less optimistic about keeping the same track in 2008, because foreign companies will now allot money to consolidating their already existing investments in the Romanian market, as most of the privatizations have been completed, according to Businesspeople's Association of Romania (AOAR) reps.
According to PricewaterhouseCoopers (PwC) officials, the biggest fluctuation in the labor force are seen in western and eastern Romania, the areas where foreign companies relocate their activities in search of smaller costs and also where Romanians have left the country to work abroad. PwC found average staff fluctuation of 20 percent in 2007, with the highest rates registered in retail (58 percent) and FMCG (38 percent). Remuneration is the main reason for the high staff turnover, according to analysts. The highest salary increase will be in the IT&C sector, 19 percent, while retail employees will enjoy average raises of 16 percent and 15 percent for the FMCG industry, according to PwC data.
The Quarterly Manpower Employment Outlook Survey, conducted by Manpower's representatives in Romania, found Romanian employers to be among most optimistic about hiring in Europe for Q2 of 2008. The 841 Romanian employers gathered from the main industries in Romania, reported positive employment perspectives for every industry sector, meaning the net employment outlook (NEO) is at 36 percent for Q2 of 2008. The survey data show that 43 percent of Romanian employers intend to increase their work force during the next three months.
By comparison, only 7 percent of the employers expect a decrease in hiring activity, while 49 percent expect no change, according to Manpower Romania's study.
Camelia Stanculescu, general manager of Manpower Romania, says the NEO of 36 percent comes from the difference between the percentages of employers predicting a rise and those predicting a fall. “The 36 percentage does not relate to the current hiring plans of the companies we interviewed, but their estimates,” said Stanculescu.
According to the study, western Romania reports the most optimistic employment forecast for Q2 of 2008, with a positive NEO value of 42 percent. In Bucharest and Ilfov as well as in the south and south-east regions, employers expect a significant increase in staffing levels, with an NEO of 40 percent for the following quarter. Despite being less optimistic, employers in the north-east and west regions also report a strong NEO of 21, according to the study.
Unsurprisingly, the sector where the employers stated the strongest employment expectations and needs is construction, which reported a net employment outlook of 54 percent, according to the Manpower study. Employers in the finance, insurance, real estate and business services sector also anticipate a rapid pace of growth in the forthcoming quarter, reporting an NEO of 38 percent. Meanwhile, employers in the electricity, gas and water supply sector are the least optimistic, reporting an average NEO of 5 percent, the study reveals.
Globally, Romania is experiencing the same rising trend in hiring expectations as Singapore, India, Peru, Costa Rica, Argentina, Poland, Hong Kong, Australia, Greece and South Africa, according to Manpower. In the EMEA region, employers in Romania, Poland, Greece, South Africa and Norway are most optimistic about adding to their work forces. In contrast, hiring optimism among Irish and Spanish employers fell considerably from one year ago, with employers in both countries reporting the weakest NEOs in the region.

By Magda Purice

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