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March 23, 2023

Social contributions paid by employers might drop by 5 pc as of 2013

The need for well-trained human resources has become a major reason of concern for employers, believes Vasile Iuga, Country Managing Partner with PwC Romania.

The Labour Ministry proposed a 5 pc reduction of the social contributions paid by employers, starting January 2013, Minister Mariana Campeanu said yesterday in a conference organised by PwC and ZF.  “We correlated this proposal with the increase of the minimum salary in economy, and figures show that the deficit will be small, and for a short time,” Campeanu explained in the launching conference of the ‘CEO Survey – Economic prospects and trends of the Romanian labour market in 2012.’ The minister also assured that the public sector will neither lay off its present employees, nor hire more civil servants in the near future. Campeanu also said that the new Labour Code does not grant protection to the employee, thus it generates many acts of abuse. “Granting protection to the employee would not represent an obstacle for the Romanian business environment, nor would it produce a disturbance,” the minister stated.In his turn, during the same conference, Vasile Iuga, Country Managing Partner with PwC Romania mentioned that, for a population of nearly 20 million, with an economy that has 4.2 million employees, the need for well-trained human resources became a major concern for employers, which encounter big problems in recruiting youths. “University graduates are not what we need in companies; a company like ours usually tests their specific skills. Well, we are testing even their skills of Romanian language. Some of them leave the country. When I go to Belgrade, I regularly meet 40-50 Romanian managers that work in multinationals,” Iuga said. Creating jobs and easing the social pressure is essential, because 4 million support 20 million is an unsustainable social model, he added. “Of course we produce, labour is taxed – employer-employee social contributions, income tax, VAT, excise duties; you will see that, out of RON 100 spent by the employer, less than 20 pc reaches the employee,” Vasile Igua added.

Nenzen, Ford: We need a ring road around Craiova

On the same occasion, the Managing Director Ford Romania, Henrik Nenzen said that the main fears regarding the evolution of his company in 2012 refer to the lack of infrastructure, the Labour Code and the costs with labour. “We invested over EUR 1 bln in Romania, we will export 90 pc of the B-Max cars manufactured in Craiova. We will produce 3,000 units and we need a ring road around Craiova, because a car will leave the gates of the factory every 5 minutes,” Nenzen explained. The business environment is confronted by two Romanias. A monopolistic Romania that deals in oil, cement and the banking sector and another Romania driven by real competition, where we – companies – are active. We fight over a narrow market, with less and less money available,” the CEO of Mobexpert, Dan Sucu said in the conference. The president of AmCham, Sorin Mandrutescu, CEO of Oracle Romania said that companies must face now a de-correlation between regions, in terms of recruiting specialised personnel, and private companies have resources of people that might be hired by the public administration, in view of increasing the competence and efficiency in this sector.

Business environment’s main fear: The volatility of the economy

The volatility of the economy is the main threat against the Romanian business environment in 2012, consider the local business leaders, according to the survey. Out of the 44 company managers that answered the survey, 64 pc “expressed their concern regarding the volatility of the economy,” and 59 pc complained about the volatile exchange rate.As for government-related expectations, company managers want authorities to develop the infrastructure (70 pc), secure the stability of the financial sector (41 pc) and support the job creation process (27 pc).The survey unveiled by PwC Romania is part of the Global CEO Survey, conducted at global scale by the consulting company PwC, through 1,258 interviews in 60 countries, during the last quarter of 2011.


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