The labour market and the employment industry in Romania has potential, but it still has to face a lot of challenges, all evolving around the same old factors: salaries, law stability, skilled workforce and new updated recruitment requirements.
The speakers and officials attending a conference on the workforce and employment industry in Romania this week in Bucharest, “Employment industry behind the scene“, organized by the Romanian Association of Temporary Work Agents (ARAMT, got together to debate all those thorny issues for the society nowadays, and precisely to reiterate the economic and social role that the temporary work has at present, as well as the potential it can have in Romania in the future, amid technology and work relations changes, more and more visible in the past years.
On top of all, a simple question arises: how difficult is to find the proper employee, be it a top talent or even a day laborer?
Dutch speaker Ralf Knegtmans, the renowned author of “Agile Talent: Nine Essential Steps for Selecting Tomorrow’s Top Talent”, told the audience that the world is changing rapidly at a bigger and higher pace than ever before and the reason is the impact of technology that has a dramatic impact on our jobs as well.
The answer, in his view, to cope with this entire rapidly growing environment also in such fields as recruitment or temporary work, is to change and innovate, as an employer, company or recruiter, in order to have a higher predictability in the future.
“How can HR make a better assistance to the business, become a business partner? 70 percent of today’s top performers will not be necessarily tomorrow’s top performers. So, we need to do something. The technology is not longer linear, but an exponential process and has a crucial impact on the companies’ life”, Knegtmans said.
He recounted that, if in the 1950s, the average life of a company was ranging somewhere from 40 to 50 years, today the figure will be ten years at most, and the future doesn’t look too bright from that perspective, as the forecast on the life of a company would be 5 years, if companies don’t adapt to the new paradigms.
The speaker stated that, as the most important tasks of a manager nowadays are getting people mobilized and select the best people, find the best people, the question is that the old selection criteria are still on.
“80% companies in Netherlands select people by CVs, competences and their past experience. The question is that is still a clever thing to do. Hiring based on the CV has proved to have an extremely low rate of predictability for success. HR will be challenging because they will have to find people to fit in today’s needs but also for the tomorrow.You need to not look at CVs and IQ only, but also at ability/skills, identity of personality traits and motivational needs. Identity and motivation is the key to success,” Ralf Knegtmans pointed out, summing up that “learning ability, the UN learning adaptability and resilience will be crucial for the recruitment market”, and particularly examining the learning agility of each candidate.
“We will see very soon the shift from IQ, diplomas to learning agility,” he argued, warning that costs for performing a ‘mis-hiring’ is extremely high, ‘on average, it will cost a company 10-15 times more for the top positions.’
Besides the new recruitment techniques more and more needed to hire the ‘agile talent’ or the ‘right employee’, there are more and more computer tools helping recruiters measure the candidate applying for a certain position, such as “the track and trace” tool, algorithms to predict stability and leadership skills of the applicant, Clever Badges (which are able to measure how the conversation goes around a table at a meeting for instance, as the computer will find out who is the good listener, who is the talker, who is the leader).
Under such circumstances, sociologist Alvin Toffler’s quote seems more actual than ever: “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn. ”
Paradoxes of temporary work in Romania: Higher turnover vs less day laborers
Meanwhile in Romania, recruiters and associations in HR, workforce are facing even more challenges, besides the one of just hiring “top talents”.
The Romanian Association of Temporary Work Agents (ARAMT) for instance, reuniting 16 members, warned over the paradoxes they are facing. According to the ARAMT president Florin Godean, although the association’s turnover has increased by 30 percent last year compared to 2016, climbing to EUR 304.5 million, the total number of employees placed by the companies in ARAMT was lower in 2017 compared to 2015.
“Despite the fact that over 61,000 people are hired by temporary work contracts, the penetration rate of the temporary work on the labour market is still low in Romania (0.3%), over ten times lower than in UK, where it stands at 3.8% and almost six times lower than the EU average (1.9%),” Godean stated.
The number of temporary employees in Romania last year was lower by 5,700 as against 2015, however higher by 4,000 compared to 2016.
Godean said that the forecast for 2018 shows that Romania and Lithuania are the countries with the highest potential to develop this market, with the turnover figure expected to rise by 20 per cent this year.
“So, there is optimistic figures in the industry, but compared to the significant rise of the turnover (higher by EUR 30 M than in 2015), paradoxically the number of temporary employees is down by 10% as against 2015,” the ARAMT leader said.
He explained the difference comes from the salary hikes, and probably from the growing unfair competition. “I am somehow concerned of this new day laborers’ law, which enables unfair competition to us on the workforce flexibility, considering that there will be no more social protection for the employed. Extending the period to 180 days will prompt abuses of some employers, and some employees will accept that, for they would praise more the extra money at the expense of the tax fees,” he explained.
Moreover, the ARAMT head is that some companies prefer to internalize the temporary workers for a contract on an indefinite period provides them with a larger stability.
The temporary works is more spread in the production sector (41%) and services (28%), most of them activating in the automotive industry (about 40,000 day laborers last year), while constructions and agriculture have low scores (2% each).
Bucharest-Ilfov region ranks first in the top of the temporary work contracts, with 8,724 contracts, while Transylvania comes second (5,943 contracts), followed by Banat (4,500) and Muntenia (4,461). The ARAMT members have brokered 764 such contracts abroad.