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Opinion
December 21, 2018 www.intellinews.com I Page 24
four out of five employers in Romania are
facing difficulties in finding employees with the skills they need, putting the country among the greatest sufferers from the global talent shortage identified by the international recruitment firm.
McKinsey lists rising workforce costs and limited labour reserves among the reasons for an expected weakening of CEE’s growth trajectory. On top of this, its report says, “CEE economies are generally undercapitalised compared with their more advanced European peers. The capital stock, measured as total gross fixed assets per employee, is 60% lower than the average for
the EU Big Five ... Labor productivity still lags behind Western Europe.5 Furthermore, the inflow of EU funds to CEE countries is likely to slow down after 2020.
“What does that mean for the countries of CEE? If they hope to continue on their path to general prosperity, they urgently need to redefine their growth strategies."
Companies across CEE are already responding
to the labour market squeeze by becoming more creative in how they attract and retain workers. In the IT sector, for example, companies offer flexible working hours and lifestyle benefits modelled
on those provided by Silicon Valley firms. In an interview with bne IntelliNews last year, serial Romanian entrepreneur Cezar Nourescu, creator of silo monitoring technology Silometer, said the trick of getting the best people is to know how
to attract them. He described his workspace as “Google-ish” with Wiis and Playstations, flexible hours and free food.
Firms are also increasingly looking to cross border recruitment. The presence of Ukraine, with its 44mn strong population, immediately
to the east of the Visegrad countries has been a pressure valve for Poland especially. Ukrainians started flooding into Poland and other EU countries in 2014, but numbers increased sharply after Kyiv secured a visa-free travel deal with the EU in November 2016.
Poland became a favourite destination for Ukraine’s Gastarbeiters, with wages in CEE’s largest economy four times higher than at home. And Warsaw sought to take advantage, offering special work permit schemes that grant limited right to work permissions. As a result, millions of Ukrainians left their homeland, albeit many of them only for a few months to earn extra cash in EU countries.
Recently, however, the flood of Ukrainians leaving the country to look for work in the EU countries has peaked, and will stabilise or start to decrease next year, said a report by the Centre for Eastern Studies (OSW) released in October. “The increased wave of migration from Ukraine to Poland, which began in 2014 is slowly beginning to decelerate. This migration is still mainly temporary in nature, and it is difficult to assess to what extent it
may become fully residential. Probably over the passage of time, the current circular migration model will stop attracting new people,” wrote OSW analyst Marta Jaroszewicz in the report.
Ukraine isn’t the only source country for migrant workers moving to CEE, however, reports from countries in the region document migration from countries as far away as India, Nepal and Southeast Asia. The arrival of new workers
can help CEE economies continue to offer a
low cost alternative to Western Europe, and wages in the region remain below those in most West European economies, despite years of convergence. Romania's hourly labour cost, for example, rose 15.6% y/y in the second quarter of the year, marking the highest annual increase in the EU, data from Eurostat showed, but wages in the Southeast European country remain among the lowest in the bloc.
A different approach
However, economists say that to continue to
be competitive internationally, what companies really need to do is start investing seriously into advanced new technologies and processes. “Today, CEE has the chance to make a strategic choice that will determine its growth path for