Facing the pressure

Facing the pressure

The HR departments must continue to demonstrate an excellent understanding of the business strategies of the companies, of the difficulties that the companies face in the market.


Dynamism, this would be the word for HR 2013.

They must be able to put themselves in the "shoes" of the business line managers, to understand their objectives and difficulties so that they can offer solutions to adapt, staff development and 100% commitment in achieving these goals.


The HR department must resolve certain conflict situations that may be caused by business pressure, and if companies are forced to lay off, to focus on the remaining employees who, although apparently "lucky" for having kept their jobs, have a lower degree of confidence in the company, wondering whether a new wave of layoffs will hit again.


The quest for specialists and talents

The "marathon of talents" will continue to be a challenge for HR departments, even bigger than in 2012, both in terms of retaining such talents in the company and in attracting them from the market. Although apparently the Romanian market offers many opportunities in terms of labor force, it is still deficient when it comes to certain specialties such as IT, and the companies are fighting for a limited number of programmers, partly due to the education system which cannot provide young graduates trained in certain programming languages; companies are willing to invest in these young graduates, to train them even at the risk of losing them in the near future, in favor of strong brands or companies that offer higher salaries.


Younger generations begin to impose their style in companies, and their desire of novelty, their desire to do what they like, not necessarily what they need to do to support themselves, leads to an increased staff turnover in the large companies. We are increasingly witnessing a mix of types of "employability": individuals working in the virtual environment, from home, on fixed-term or temporary work contracts, free lancers working on specific projects or people who have second jobs.


Regardless of the company's type, there are some positions where you cannot afford the slogan "The Cheaper the better". We refer to highly specialized positions that require a long period of preparation or an extremely high cost of replacement. Not to mention the key management positions where regardless of  the company's type, Romanian or foreign, big or small, the departure of such persons may cause damages with average or even major impact.


In deed, there are entry level positions, generally large volumes, where the watchword is cheaper but let us not forget that in Romania these positions can still be occupied by college graduates, while in Western countries the same positions are occupied by graduates of secondary studies. In other words, in Romania an employer can still have relatively low wages for certain skills and a high potential but not for long. That is why there are companies that accept a high fluctuation of personnel in order to maintain low costs.


The strategy of attracting talents by resorting to the executive search service is reduced due to the slow economic growth and the small number of new investors in Romania. However this service will continue to bring big volumes to head hunters because the companies want to attract the best candidates on the market and have the guarantee that they have chosen the best candidates. 


Unfortunately, the crisis has left behind a lot of managers over 45 years, who have knowledge and an extensive experience in their field but who have failed to adapt to the pace and requirements of a declining market or who had remained with the same salaries as before the crisis. There are situations where old managers are replaced with new ones who are younger, cheaper and with a great desire to climb. Attracting talent and innovation in companies depends largely on the development potential, the brand and freedom of decision offered by the company.   


Temporary work, an alternative with potential

That is right, temporary work have increased dramatically in the years of crisis especially in 2010 when the volume almost doubled compared to 2009, after which the pace slowed to 20% in 2011. This growth potential and the desire for a more flexible legislation have led to the formation in 2010 of the Romanian Association of Temporary Employment Agents, made up of the largest players of Romania and whose objective is promoting temporary work in order to ensure a quick and reliable compatibility between the supply and demand in the labor market.


The temporary work provides a job for everybody and every employee is in the right place, it offers decent work conditions, providing an entry in the labor market, creating an opportunity for permanent contracts. The temporary work also supports the professional shifts in the individual career, being in the unique position to balance the needs of individuals against the constraints of companies, being thus an engine for change.


The temporary work is a successful solution especially in this period when companies have limited vision in relation to expansion plans because of the uncertainty of the economic environment.


This provides the most flexibility in allocating the resources needed for both rapid staff growth and staff reduction situations especially in a complex, volatile and unpredictable market.


Classic case scenarios for temporary work are: sudden increase of workload for a limited time, replacing the people who are in parental leave, starting a specific project, testing a new product or entering new markets.


Internships – educating for work

The education system should be more dynamic, it needs to adapt quickly to the needs of companies, to include in the curriculum subjects with immediate practical application. The initiative of the Law Project envisaging internships for secondary and higher education graduates is salutary, and we hope that it will not delay too long. However, the applicability of this law will largely depend on the attractiveness of tax incentives and the degree of bureaucracy imposed by the authorities. This law should help business, not bury it in papers and companies should be regarded as a developers of the economy not as potential tax dodgers.


Since the temporary work is one of the few industries that have grown during the crisis, I believe that removal of the VAT levied on the full amount invoiced by the temporary work agent to the customer would stimulate job creation even more.  At the moment, VAT applies to the entire amount billed and the bulk of the invoice value consists of wages and payroll taxes.


Also, it would be beneficial to make certain adjustments to the current legislation which deprives temporary employees of certain facilities that are granted to some permanent employees of our clients. For example, a temporarily employed programmer leased to a software developer client cannot benefit from a income tax reduction simply due to a legal vacuum.