Romania’s workforce crisis and foreign workers

Romania is faced with a workforce deficit, resulting in a demand for foreign workers.

Christine Leșcu, 12.09.2018, 12:08

Given its
population decline and the emigration of so many of its people since 1990, it
was to be expected that Romania would face a workforce deficit at some point.
The situation has gotten worse from one year to the next, so that Romania has had
no choice other than to import staff to occupy the vacancies. At the moment,
Romania has the second highest demand in the European Union for workers from
outside the European Union, after the Czech Republic. Most of the foreign
workers employed in Romania in 2018 come from Vietnam, namely 35%, followed by
Turkey, Nepal, Serbia, Sri Lanka, China and the Republic of Moldova.

The workforce crisis
is being felt in particularly in such fields as the restaurant industry, the
construction of ships and floating structures, the clothing and footwear retail
trade, as well as in the residential and non-residential building industry. Accidentally
or not, these are partly also the areas employing the Romanians who have now settled
in EU and non-EU countries for a number of years. That is one possible
explanation for Romania’s workforce deficit, whose causes are also to be found
in the situation of the country’s education system, says the S&D Euro MP and
businesswoman Maria Grapini:

It must be said
that the workforce crisis affects execution position, not positions that
require higher education. Unfortunately, we now see the results of closing
vocational schools a few years ago, although the dual education system has started
to function in the meantime. The law on in-work apprenticeship has also been
passed. But the demand for more workers is not yet met. My firms are active in
the textile industry, which is confronted with a serious crisis when it comes
to skills that used to be acquired in vocational schools, such as weaving and
dyeing. Not to mention of occupations such as that of electrician, welder,
lathe operator, etc.

We are mainly importing
unskilled work, confirm the representatives of consultancy and human resources
firms, such as Dana Ionescu, a global mobility manager with ADECCO, who says
that importing foreign workers is not cheap:

It is in no way
cheaper to import foreign citizens instead of hiring citizens from Romania. There
are some salary-related restrictions for certain types of workers. While a
Romanian citizen can be hired for the minimum wage, a foreign citizen for whom
a work permit is obtained must be offered the average wage. To this we add the
cost of the paperwork: the fee of the consultancy firm, the translation of
documents, notary fees as well as other taxes.

Irrespective of
the causes of the workforce crisis and its costs, Romanian employers need a growing
number of foreign workers and have called on the government to issue more work
permits. The human resources expert Dana Ionescu will give us more details:

Data centralised by the National Employment Agency
show that out of the total number of vacancies reported in the first semester
of 2018 and made available to the people who are looking for a job and who are
registered as beneficiaries of unemployment benefit, 31,464 jobs were repeatedly
reported as vacant by employers. Due to this deficit, there emerged the need to
increase considerably, from one year to the next, the number of foreign workers
that can be hired on Romania’s territory. This number is approved by a
government order at the beginning of each year, and it is later modified during
the year.

This year, the number approved by the government
according to types of workers newly admitted on the labour market has increased
by 55% as compared to the same period of 2017. Initially, the numbers for 2018
included 7,000 workers and, in August, the authorities decided to increase it
to a record number, according to Dana Ionescu:

For the permanent workers category the amount doubled
from 4,000 to 8,000, while the number of posted workers has grown more than
four times. It remains to be seen if another increase will be needed by the end
of the year.

Besides measures such as correlating training with the
market needs and applying the in-work apprenticeship law, the idea of
encouraging Romanians to return home has also been discussed. But, in this
case, there emerge other obstacles, according to Euro MP Maria Grapini:

People have lost confidence. When I visited Spain, I
met the representatives of the Romanian community there. They told me they
don’t trust the sustainability of the labour market. They have not raised the
issue of wages but the long-term sustainability of jobs. We need public
policies focused on this very aspect.

Until then, importing workforce is the solution at
hand. Talks have been held on simplifying the legislation for bringing in workforce
from abroad. The authorities are also considering the elimination of a
provision regarding the average salary, because, once the government has set the
minimum wage, it should be up to the market to decide the level of wages for
employees depending on their training and expertise. It remains to be seen of
these ideas will turn into laws.