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Opinion
September 29, 2017 www.intellinews.com I Page 20
the region, along with outsourced IT and shared service activities.
Now, however, recent media reports from the region reveal automakers are struggling to find workers, and often looking south to Serbia or east to Ukraine to fill the gaps. Earlier this year, Volk- swagen’s Slovak unit reportedly had to bring in around 500 workers from Audi’s factory in neigh- bouring Hungary, while Kia imported workers from Bulgaria. Similar stories are coming out
of Czechia, most recently that vehicle backseat producer Adient was unable to meet unexpectedly high demand from Skoda Auto due to a shortage of workers, daily Hospodarske noviny reported.
The situation has not yet reached crisis point. Iwona Janas, regional managing director Man- power Group Poland and Russia, points out that while “the market is shortening and we are seeing an increasing talent shortage... still compared to more developed countries of Western Europe we are not seeing the same level of talent shortage”. Janas also believes the ongoing tightening of labour markets in the region is a natural evolution that is closely linked to economic growth.
However, the combination of rising costs and a shortage of workers has raised the question of whether investors will shift south-eastwards to the even newer EU member states of Romania and Bulgaria, or the prospective member states of the Western Balkans.
In the last few years, there has already been
an increasing flow of export-oriented FDI into countries such as Romania, Bulgaria, Serbia, Macedonia and Moldova. On the other hand, this has not been the result of companies relocating their operations from CEE to Southeast Europe, and the relative labour productivity of the two regions undermines the rationale for moving from CEE to SEE in search of lower labour costs.
“Although Romanian workers earn less than CEE counterparts, the country is not really cheaper than other CEE countries. The nominal labour
costs per hour are lower, but if you account for productivity, this difference vanishes,” says Árokszállási.
Other issues such as the sharp difference in the quality of infrastructure are also relevant. Daim- ler’s selection of Poland over Romania and other destinations in the region for a new plant was attributed by Romania’s then economy minis-
ter Costin Borc to the poor infrastructure in the Southeast European country. The relatively small populations of most Southeast European coun- tries (with the exception of Romania) is another limiting factor for employers looking for hundreds or thousands of workers.
“From the [unit labour cost] ULC viewpoint it makes sense to move the activities (especially the labour and wage intensive) from the West into the [new EU member states],” says Podkaminer. “Moving the activities from Poland or the Czech Republic into Romania and Bulgaria may also make sense. But one would have to consider also the fact that the latter two countries are located much further away (at least from Germany and the Nordic countries) ... Besides, their resources of properly skilled labour may be insufficient, the business services underdeveloped, etc.”
Nonetheless, despite having lower productivity than the Visegrad countries, Romania has man- aged to attract numerous manufacturers, among them major auto parts suppliers Dräxlmaier and Continental, but most are concentrated in the west of the country where exporters can take ad- vantage of the proximity to Hungary’s much better road network.
And even in Romania, an available pool of low- cost workers is by no means a given these
days. One economy ministry official told bne IntelliNews that manufacturers were increasingly having to look to smaller industrial towns to
find workers. In the IT sector, the labour market is overheating dramatically, and firms are now looking beyond the capital Bucharest and second city Cluj Napoca (recently rated the preferred