Labour-intensive industries cannot survive in Romania

The shrinking population, the difficulty of finding employees, and the rising costs will be most strongly felt in the area of companies with production operations.
Very few people are joining industries such as constructions, textiles or bakery, and those who have Spain or Italy as an option are asking for very high wages to stay in Romania.
As their number dwindles, the battle for employees has become ever fiercer. “Industries that require lot of people are dying,” believes Florin Tataru, national HR manager with Vel Pitar. Tataru believes the domestic market will follow the trend in the West: “There will be exits from the Romanian market. What’s happened with Nokia in Germany will happen with other companies in Romania, as well”.
The Romanian economy has two options: either become technologically advanced, as Western markets did went they faced a similar situation, or focus on industries with a higher added value, such as IT&C and finished products, rather than part production fields.
Romanian labour minister Paul Pacuraru believes most sectors are being hurt by a personnel shortage at present, and the bad news is that Romania has yet to reach the peak of this shortage, which is forecast for several years’ time, when the effects of the lower birth rate will be felt.
Another field that has been experiencing with a lack of personnel is the constructions sector, where the personnel shortage is put at several hundred thousand people. The identification of the most profitable locations for production in terms of costs has tightened competition. Wages in the textile industry are among the lowest in the economy, with an average that revolves around 200 euros per month.
The textile industry has lost 40,000 people, and reached an average number of 400,000 employees last year, says Maria Grapini, general manager of Pasmatex of Timisoara.
Several textile plants have been closed lately. Real estate projects are developed or shopping centres have opened on their sites.
The first step textile producers make is to relocate toward the eastern part of the country, where the labour deficit is not as high and costs are lower.
Romania is experiencing a more or less acknowledged personnel problem. “The personnel problem is the bigger in industries that require many people,” explains George Caescu, general manager of textile producer Iasitex. He believes, however, that the textile industry will not disappear.
Production and maintenance positions are difficult to cover at Vel Pitar, as the management is recruited and promoted from inside the firm. Vel Pitar has invested 20m euros in technology in recent years. In parallel, the number of employees has fallen.