AmCham Romania presented the results of an analysis of the labor market in Romania and the economic impact of the labor force deficit. The analysis conducted for AmCham by PwC Romania provides an overview of the structure and evolution of the labor market in recent years, as well as an estimate of the additional labor force needed for Romania to recover gaps compared to the EU level, and support economic growth objectives.
The objective of this AmCham initiative is to identify the most appropriate measures to reduce the human capital deficit in the short, medium, and long term, and to recommend them to responsible decision-makers and the private sector, for which ensuring the necessary labor force is one of the greatest challenges faced in Romania.
Presenting the context and objectives of this analysis, AmCham Romania Vice-president Elisabeta Moraru, emphasized: "Romania owes its most significant investments in the economy to human capital, which, in terms of quality and availability, has long been among the most appreciated competitive advantages offered by our country. In recent years, an overlap of internal factors and the effects of global trends have eroded this advantage, and new ones have not been created. While we cannot reverse or control digital transformation, the green transition, or the geopolitical context, investments, and reforms in critical systems - education, health, infrastructure, and administration - can reduce brain drain, school dropout rates, disparities between regions, inactive population rates, and similar aspects that put pressure on the labor market to alarming levels. The AmCham analysis highlights the problems and emphasizes the solutions we can implement so that opportunities do not pass us by. Without well-prepared people in all fields, Romania's ambition to sit at the table with developed countries as part of the OECD, intensify investment and trade relations with the United States, attract high-value-added investments, and be a regional leader will remain just wishful thinking."
Outlining the systemic causes of this deficit and estimating the need for additional labor force, Alex Milcev, Member of the AmCham Romania Board of Directors and Chair of the AmCham Labor Market Committee, stated: "Our message is that measures to reduce the human capital deficit will have beneficial effects on many levels, it's not just about having more eligible candidates for a vacant position. Activating more workers in the economy increases the capacity to produce goods and services in Romania, for domestic consumption and for other markets. For most sectors, it means not having to delay projects and investments due to a lack of personnel, it will support efforts to ensure a budgetary balance by increasing the share of labor-related taxes in the state budget. A well-qualified workforce will increase productivity levels, reduce operational costs, and avoid the accumulation of internal blockages or issues with suppliers, transferred throughout the value chain, or delays in the delivery of goods and high-quality services. Beyond the current pressure, the strongest signal from our analysis refers to the future. If some of the short-term interventions will partially alleviate the tension in the labor market, without systemic measures, without major investments that reduce Romania's gap compared to the European average in everything that determines the quality of life and public services, without a serious and impactful integration of the lifelong learning concept, it will be impossible to ensure a quality human capital and the skills necessary for an economy and society that are in a rapidly transforming process."
In terms of recommendations, the short-term measures included in the analysis fall within the areas of intervention identified at the EU level.
"We consider relevant for Romania measures that aim to attract labor, increase the use of existing labor, or activate underutilized resources by removing barriers in the labor market for different groups that are currently long-term unemployed or inactive. For the first category, given the increasing demand for non-EU workers, the recommendations aim to improve this flow by optimizing the work permit issuance process, gradually increasing the quota for non-EU workers, developing alternative, simplified, and priority procedures for highly skilled labor or adapting best practices from other markets," pointed out Anca Grigorescu, Co-Chair of the AmCham Romania Labor Market Committee.
The analysis was conducted for AmCham Romania by PricewaterhouseCoopers (PwC) Romania, based on publicly available data provided by the National Institute of Statistics, Eurostat, the National Strategy and Forecast Commission, and the General Inspectorate for Immigration. The analysis is structured into four components: (i) a description of the current context of the labor market, (ii) an estimation of the labor force deficit, (iii) an estimation of the economic impact of the labor force deficit, and (iv) policy recommendations based on models of best practices from other states. Methodological specifications are included within the analysis.
The analysis is available for reference on AmCham Romania’s web page here: