Workforce in Romania: A Shrinking Talent Pool

12 August 2019

Specialized labor force and low wages have, for years, represented a major competitive advantage for Romania. But for a while now the paradigm has changed, as the talent pool started to shrink and recruitment has become a real challenge.

Romania’s population has been dwindling steadily since the 1990s both because of a decrease in birth rate and a growing appetite for migration.

In 2018 Romania has seen its lowest birth rate recorded in the last half century, and all projections point to the fact that the country will continue to experience very significant population on decline by 2050.

 

 

Emigration has also been one of the key issues in Romania since the early 1990s. The problem only got bigger after the country joined the EU in 2007, leading to an increased weight of high-skilled migration. United Nations Population Division estimated the total number of emigrants to have reached 3.5 million as of 2017, representing approximately 18% of the country’s population. In contrast, Romania has welcomed very few immigrants during this time - Eurostat data shows that as of January 2018 the share of non-nationals in Romania was as low as 0,6%. This outflow migration of skilled labor resulted in labor shortages, skill gaps, and distorted wage demand.

One partIcular issue of the energy industry is that many students want to steer clear of heavy labor, rendering the industry rather unattractive.

Moreover, while the country has benefited greatly from increased competitiveness in the market, this has in turn generated difficulties in terms of workforce - there are many more companies in Romania today which are looking for the same type of skills, and this makes access to talent much more complicated.

 

 

Companies are engaging various strategies to tackle this issue: most often they initiate collaborations with relevant universities, and many have started to import workforce or use technology as an alternative. Human resources are becoming an increasingly important topic in the government’s agenda as well, as they urgently need to formulate and enact policies at a national level to address all aspects of the crisis.

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