HR News by CNA International Executive Search Romania, March

Wed | 31.03.2021

Human Resources

 WAGES INCREASES IN ROMANIA IN 2021

The fact that the year 2020 was one that turned upside down any forecasts is no longer a something new.

When specialists analyze the effect of last year's changes on people, the labor market - wages, unemployment, layoffs - are the elements that best tell the story.

 

The year 2020 was quite difficult for the employees in Romania. Many of them went into technical unemployment and wages remained at about the same level as in 2019. The unemployment rate has also risen, but estimates for 2021 are quite optimistic about the labor market, despite economic problems. caused by the coronavirus pandemic.

In the first part of 2020, although the first effects of the pandemic had appeared, the gross salaries among private companies increased by a range of 5-7 % or didn’t increase at all.

If 2020 was the year in which new elements such as widespread remote work, the way in which employment and dismissals are made, the restrictive measures adopted by the authorities were novelties to which we had to adapt and which significantly changed life as we knew it, in 2021 we can say that we have almost learned to live in this new world.

Estimates of labor market developments are quite optimistic in the context of the coronavirus pandemic.

 

For 2021, private companies anticipate an average increase in gross wages of 4.68%. The 2020 revenue advance took place in the context of the positive performance recorded in 2019.

The trend seems to continue in the year that has just begun, but not at the same pace. And this is because most companies have prepared more conservative budgets for 2021, due to the uncertainty generated by the moment of exit from the pandemic. By sectors, the highest salary increases at the beginning of the year were in retail, of 9.87%, followed by the banking sector with 7.39%.

Regarding the expectations of employees from their employers in 2021, the first places are the resumption of salary increases, recruitment and return to budgets before the pandemic.

The main extra-salary benefits that companies have caught in their good budgets are meal vouchers, extra days off, medical subscriptions, free coffee and soft drinks, healthy food when in office, and bonuses granted on various occasions, as well as flextime and remote work,

The estimates regarding an average gross salary in the private sector in the year that has just started are of 5,078 lei, while for the public employees an average gross salary of 7,141 lei is estimated.

The scenario of the Ministry of Labor regarding the minimum gross salary in 2021 shows that it will increase from 2,230 lei to 2,380 lei. An increase of 150 lei.

 

Even if wages will increase in 2021, the effects of the pandemic on the labor market will be visible and the most obvious indicator will be the unemployment rate which is now around 5.3%, but estimates made by the European Union show that Romania will reach in 2021 a 6.2%.

The government has decided to extend until the end of June 2021 the social measure of technical unemployment granted under the measures implemented to manage the coronavirus pandemic, given that some companies will have to reduce their activity and lay off employees.

The Moneycorp barometer shows that the economic recovery in Romania, after the COVID pandemic, will be an asymmetric one, with sectors that will have a sustained growth and others that will continue to face difficulties. Over 60% of companies therefore estimate that they will reach turnover in 2019 only in 2022. It is also the year in which human resources specialists expect a complete return of the labor market.

But perhaps the saddest thing is that the number of candidates who will be hired for positions below their level of training and experience will increase.

 

This article was provided by our HR Partner, CNA International Executive Search Romania.

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