The Importance of Recruiting Romanian Staff: An In-Depth Look at Romania's Labor Law for Foreigners

In today's global landscape, understanding Romania's labor law for foreigners is crucial, especially considering the growing interest in recruiting Romanian staff. With its competitive career opportunities and the potential for settling in the country, foreign workers, whether highly skilled or expatriates, are drawn to the Romanian job market. Contrary to popular belief, the challenges faced by foreign workers outside Bucharest are manageable and pose no significant threat to businesses. Let's delve deeper into these dynamics and explore why recruitment in Romania is a wise choice.

Recruiting in Romania offers a compelling opportunity for foreign employment, combining cost efficiency with a highly skilled labor force proficient in multiple languages. The country's membership in the European Union enhances these advantages, providing access to a wider market and regulatory support. However, effectively navigating Romania's labor law requires a nuanced understanding, particularly when it comes to recruitment processes, working conditions, and managing non-skilled labor forces from countries such as Pakistan or Vietnam. This article aims to offer an insightful analysis of why Romania stands out as an attractive destination for recruitment.

Cost Efficiency and Skilled Labor

Recruiting a skilled workforce in Romania has become increasingly cost-efficient and advantageous since the country's accession to the EU in 2007. The remarkable economic growth experienced by Romania has not only influenced the labor market but also created favorable opportunities for foreign employers. Notably, the gross minimum wage has seen a significant rise from 390 lei (79 euros) in 2007 to 3300 lei (664 euros) in 2024. This substantial increase in wages has contributed to the development of Romania's human capital, resulting in a highly educated and versatile workforce. The statistics pertaining to the country's labor force further reinforce this notion, highlighting the abundance of skilled workers available for recruitment:

 

• Active Civilian Population: In 2022, Romania had a population of 7.6 million individuals.
• Employment Rate: The employment rate in Romania was 62.3% in 2022.
• Employees: In 2022, there were approximately 5.5 million employees in the country.

 

Despite these encouraging statistics, Romania remains competitive by offering lower labor costs compared to other European nations. This cost-effectiveness, combined with a highly skilled workforce, positions Romania as an appealing choice for companies seeking to recruit top talent while optimizing their operational expenses.

Romania's recruitment industry has embraced digitalization, showcasing the country's adaptability and forward-thinking nature. Now, electronic payslips and the use of electronic platforms for processing employment contracts have become standard practices. Moreover, the government provides subsidies to support non-IT companies in their digitalization efforts. This streamlined approach to payroll, despite its intricacies, combined with Romania's highly educated workforce, positions the country as an ideal destination for foreign employers seeking both efficiency and skill.

Language Proficiency and Education in Romania

 

To fully leverage the benefits of Romania's labor market, foreign employers must have a deep understanding of language proficiency and education within the workforce. Here, we provide essential insights on these key aspects:

• Educational Landscape:
• Tertiary Education Attainment: Romania has the lowest rate of tertiary education attainment among EU countries, standing at 23.3%. This figure is almost half of the EU average of 41.2%. The primary reasons for this disparity are high rates of early school leaving and limited participation in higher education by disadvantaged groups.
• In Romania, only 50% of adolescents have basic or above-basic digital skills, which is the lowest rate in the EU. This indicates a significant gap in digital literacy, which is crucial in today's job market.
• On a more positive note, Romania surpasses the EU average with 56.6% of upper-secondary pupils enrolled in Vocational Education and Training (VET). However, there is a need for more work-based learning experiences to address the lack of practical skill development.
• Language Proficiency:
• English Proficiency: English is highly valued in the Romanian labor market, with 62% of respondents acknowledging its importance for employability. The majority of graduates in Romanian cities are fluent in English, and most college graduates have excellent English skills.
• Language in Education: English has been given priority in Romanian education since the 1989 Revolution, replacing Russian as the main foreign language. This historical change highlights the abundant availability of English-speaking candidates, aligning perfectly with Romania's reputation for fast internet connectivity.

European Union Membership Benefits

 

The accession of Romania to the European Union (EU) has greatly improved its attractiveness for foreign employment and investment. This is due to various developments such as infrastructure and business environment improvements, progress in taxation policies, and the expansion of the labor market through easier access to skilled workers from other EU member states. Additionally, the EU's investment in infrastructure has not only enhanced the quality of life, but also created a more favorable environment for new businesses. Furthermore, Romania has made significant strides in aligning with EU standards, particularly in its business landscape and state institutions.

One major benefit of EU membership for Romania is the expansion of its talent pool, as it allows for easier recruitment of skilled workers from other EU countries. The freedom of movement policy has also led to a significant Romanian diaspora, further increasing the mobility of the workforce. Additionally, the country has set a quota for 100,000 non-EU workers, demonstrating its openness to foreign workers and enriching the labor market with a diverse range of skills and experiences.

The EU is a critical trading partner for Romania, accounting for over 70% of its trade flows and approximately 85% of its foreign direct investment (FDI) stock. However, it's worth noting that Romania is not part of the Euro Zone, which can lead to trade inefficiencies due to higher transaction costs and exchange rate fluctuations.

In order to navigate Romania's business landscape successfully, understanding the interplay between cultural compatibility and work ethics is crucial. The formal structure of Romanian business culture, characterized by a strong hierarchy, demands a professional demeanor from foreigners. Building personal relationships and showing interest in Romanian culture can strengthen business relationships, and it is customary to bring a thoughtful gift when invited to a Romanian home.

Meetings in Romania are typically led by senior members, and punctuality is highly valued. However, the country's labor market presents unique challenges for foreign companies and workers, including legal processes, economic and political considerations, and poor infrastructure. These challenges must be carefully navigated in order to operate successfully in Romania's emerging market.

 

Conclusion

 

In conclusion, Romania's accession to the EU offers unique opportunities and challenges for foreign employers and workers. While the country's cost-efficiency and access to a skilled, multi-lingual workforce make it an appealing destination, it is important to understand and navigate the legal and bureaucratic frameworks, as well as adapt to cultural expectations and work ethics. As Romania's workforce continues to evolve within the context of global economic trends and EU policies, there is great potential for foreign entities to thrive, but they must also address specific challenges related to legal processes, political stability, and infrastructure development. Continuous learning and adaptation are crucial in maximizing the opportunities that Romania offers to the international community.

Call me if you want to recruit people in Romania +32 478 331 799 or mail me frjacobs@telenet.be We have more then 20 years recruting experience In Romania.