Keeping the cost control in sight

Keeping the cost control in sight

We are facing the crisis for several years already, so I would say that HR is not having in 2013 much more different challenges than in the previous years.

Budgets are getting tighter and tighter and HR plays an important role in identifying those cost cutting mechanisms that will affect the least the morale and the engagement of the employees, while continuing to deliver increased productivity levels. Moreover, HR plays an important role in making cost structures more flexible, by shifting focus from fixed pay into variable, performance driven pay. These days, organizations are building their reward strategies and policies, looking at a higher degree of differentiation based on actual performance.



Talent costs

Romanian market has evolved a lot over the last 10 years in this respect. More and more organizations (being them large, mid-size or small) realize that the cost of talent replacement is much higher than that of talent retention. Looking at the multinationals (which is the market segment which I am most familiar with), most organizations run internal talent management programs, which tell us that talent retention is on the priority of their HR agendas. Surely, the crisis has played its role in talent retention, as these years, we have seen lower talent mobility than 5 years ago. People are more skeptical to make a move these days than before. However, the last place where you would like to be as an organization, is to have your talent captive. Captive talent is most probably disengaged and they would leave whenever the right opportunity comes. Therefore, organizations should keep investing in the development of their talent and make sure they keep them fully engaged.



A lesson we have all learnt from this crisis, is that, to be successful, we need versatile talent, people who are able to reinvent themselves, reinvent the organizations they are part of and reinvent the way things are getting done around them. In this context, we, HR people, play an important role in identifying, developing and promoting such talent in our organizations. Organizations should create critical career paths for versatile talents, by exposing them to cross-functional careers, to prepare them better for the next career jump. Versatile talents are usually, what we call in HR world, the A type profiles, people who are always challenging the status quo, reinventing the wheel and always looking for out of the box solutions. Usually, these people are not easy to manage, sometimes challenging their own managers. Therefore, such talent should be carefully monitored and nurtured, and should be given special development opportunities to keep them motivated and engaged.



Filling a need, rather than saving option

Staff leasing should be used to fill in temporary labor needs, rather than cost-effective solutions. However, it is true that in general, leased staff is cheaper than employed staff, but this is generated by the fact, that staff leasing is typically used for temporary jobs, requiring less specialization/qualifications than full-time jobs.


Most of these jobs are usually filled in with students, who are seeing these positions as an interim solution, allowing them to get some practical experience and earn some pocket money during their studies. Coming in an organization, as leased staff, can be an entry gate to a permanent position, especially for the high performers.


Organizations look at the pool of leased staff to fill in their permanent positions, as long as there is a fit between the company needs and the qualifications of the candidate.



Too academic to work

The syllabus of the university education system in Romania is a little too academic, with little emphasis on practical applicability; therefore, a lot of graduates can’t use much of their formal education when they land in a job. Moreover, having little understanding about what different jobs or sectors entail, sometimes they find it difficult to make informed career decisions. Therefore, the academic syllabus should be revised, by incorporating more hands-on practical examples in their teaching methods.


We welcome increased dialogue with the academia in order to ensure a better alignment of labor needs of businesses, and the outcome of the education system.



Labor has a quite upright Code

The current Labour Code represented a major step forward towards a flexible labour market. It balances the relationship between the employer and the employee, giving both parties adequate instruments to protect their interests. Therefore, I think the Labour Code is a good piece of legislation which does not require major amendments except for certain technical revisions necessary to avoid redundancies, align texts and bring clarifications where there is room for interpretation.