Industry report: Rising labor costs, retention of experienced employees among challenges of business services companies in Romania
<p>The rising labor costs, the recruitment process, and the retention of experienced employees are the main challenges for business services companies active in the country, according to the 2024 report of the Association of Business Service Leaders in Romania (ABSL).</p>

<p>According to ABSL data, all companies reported salary increases this year, and the estimated growth rate for next year is approximately 6.7%. The median gross monthly salary of a software developer is approximately RON 18,700. A payroll specialist earns an average of RON 9,900 gross, while a procurement specialist receives RON 9,300 gross per month. Industry salaries have increased between 48% and 71% in the last five years.</p>

<p>The highest median gross salaries, of approximately RON 13,000 per month, are recorded in Bucharest, followed by the region Transylvania/Banat with almost RON 11,000 gross/month, Muntenia with approximately RON 10,000 gross/month, and Moldova with RON 8,300 gross.</p>

<p>The company benefits remain important for industry employees, but the 2024 tax measures have changed employees’ preferences. The most used benefits are the additional vacation days, the flexible working hours, the health insurance, and the flexible benefit platforms.</p>

<p>In terms of total labor costs, Romania is more attractive compared to Poland, the Czech Republic or Slovakia. However, Bulgaria and Hungary remain more competitive in terms of low cost, industry representatives argue.</p>

<p>“The increase in labor costs is eroding the competitive cost advantage, which used to be one of the reasons why investors in the industry chose Romania. Soon, even foreign languages ​​will no longer represent a competitive advantage. The training of employees to implement and use Artificial Intelligence and automated processes could now make a difference. In general, developing professional skills to create services with higher added value will contribute to keeping Romania in the top of investors’ preferences,” Ciprian Dan, the president of ABSL, says.</p>

<p>The economic and geopolitical context has reduced individual mobility in the industry, ABSL said. According to the organization’s reports, the average employee turnover rate was 16% last year, with employees having an average age of 33 and spending approximately three years in a job.</p>

<p>“Recruitment, however, remains a challenge for the outsourcing industry. According to our statistics, this year HR departments analyzed 30% more CVs compared to the previous year to hire the same number of graduates. In the case of experienced employees, specialization in certain fields combined with expertise in the digital area (automation, RPA, use of artificial intelligence) will bring them significant advantages in career development,” Cătălin Iorgulescu, VP of ABSL, explained.</p>

<p>According to ABSL, 77% of the surveyed companies confirmed an increase in turnover in 2023 compared to 2022, but only 58% of them anticipate an increase in the future.</p>

<p>“Poland, Hungary, and Slovakia offer investors numerous advantages for creating new jobs. Romania had a relatively competitive program of grants and tax incentives that contributed to the steady growth of the business services industry in the past, but this was interrupted due to budgetary constraints. The lack of tax measures to support the development of the industry can have a negative impact on the growth of the sector, the creation of new jobs, and the retention of specialists in the country,” Iorgulescu said.</p>

<p>The business services industry in Romania has more than 200,000 employees. The main cities where this sector is developing are Bucharest, Cluj, and Iași, followed by Timișoara, Sibiu, and Brașov. The main services provided, by number of employees, are customer operations, IT and finance and accounting.</p>

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<p><em>simona@romania-insider.com</em></p>