Top HR agenda: Regional and local perspectives

Unemployment is reaching worrying numbers in many European countries and it will be the top priority for most of the politicians` agendas in the next years. The impact has been mainly on young and old people, slowing down both entering and exiting the labor market, thus bringing stagnation.

Further impacts:

· The main danger is reacting slowly, thinking that things will go back to the previous situation.

· The main danger is not adapting to occurring changes.


Jobs are created and destroyed at a faster pace now, and Private Employment Agencies are a tool to solve this need for skill shift.


It is a fact that where Private Employment Agencies have the highest penetration rate in labor market, unemployment rate is lower (source: Ciett);



• Unemployment and agency work rates follow inverse patterns: The higher the agency`s work penetration rate, the lower the unemployment rate.

• Private employment services create jobs: In the USA, private employment services provided 401,000 new jobs in 2010, the largest annual growth posted since 1994. In Europe, since the low point of the economic crisis in 2009, the sector has provided up to the middle of 2011 at least 900,000 new jobs on top of the 3 million agency workers that have remained employed throughout the downturn.

This builds on the performance during the period from 2002 to 2007 when there were 1.3 million new jobs in the industry.

• Agency work does not substitute permanent contracts: 74% of user organizations would not consider hiring permanent workers as an alternative to taking on agency workers and 62% of them would not have created jobs if they had no access to private employment services.


With all the governments integrating “equal pay” legislation into local labor laws, to promote the use of temporary contracts some regulations become strategic, like applying VAT only on agency margin or providing training funds for job shifting, to provide the so-called “flexicurity” to the employees.


Instead of unemployment indemnities, training and outplacement financed by the governments can answer to the more dynamic needs of the actual labor market in Europe.


Romania is the country with the lowest penetration rate for temporary staffing in Europe, the government still has opportunities to fight unemployment cooperating with Private Employment Agencies.


European Union will play an important role if funds for training will be used also to sustained flexicurity. The “generic worker” profile will be less requested in the future, continual training will become a key factor to find a job, and the training should be driven by market needs with the support of agencies and governments.


The Labor Code and the way it is fairly answering to the current needs of labor market

From the perspective of the foreign investor, the stability of the legal framework, especially concerning the fiscal law and the regulation of the labor relations, is essential for business planning and strategy setting. The frequent modifications intervened at legislation level represent a harmful factor for the business environment, worse even than a restrictive legislation.


The modifications done to the Labor Code in 2011 have created an imbalance in terms of the rights and obligations of the employer and employees. This has determined, instead of an increased flexibility of the juridical labor relations, a blockage effect.


The application of the previsions of the Labor Code emphasize a rupture between this code and the fiscal code, leading, in a market dominated by financial disturbances, to limit employers from offering benefits of any kind to employees, either because of a legal vacuum determined by the elimination of the Collective labor agreement or by the elaboration method of the Labor Code specifications.


As another topic, the performance objectives, the evaluation criteria and the other elements that measure the professional performance of employees must not be assigned by employee, but by position, in order to maintain the objectivity. The legislator should rethink this principle without restricting the right of the employer to set the boundaries of the objectives he wishes to reach, but also, without putting too much burden on the employee, leading to his exhaustion.


Another issue that should be solved is the legislators` intention to increase the duration of the determined employment contract from 36 months to 60 months. This modification would be against clause 5 of the European Directive no. 1999/70 CE that sets rules to prevent the abuses on using determined period employment contracts. It should be recommended, for situations concerning the increase or temporary modification of the employer activity, another tool to cover the human resources needed for short intervals, namely the work through a temporary work agent.


One good aspect brought by future changes on the Romanian Labor code is the appearance of a new institution, the telework, defining the activities involving Information technology, held in the framework of an employment contract, either at the headquarter of the employer or outside. This type of new concept of labor relations takes into consideration the new reality in our society, technology changes, and the acceleration of labor processes that demand a certain mobility and flexibility, without departing from the legal previsions of drafting the employment relations.


These changes in the Romanian Labor Code, with the exception of telework, do not bring significant changes or improvements in the relationship between employers and employees or in the way foreign investors are supported to develop business. They are only meant to reorder and realign the juridical norms of the Labor Code with other special complementary laws.