Romania: Economic Development
Since 1st of January 2007 Romania is a full member of the European Union. It offers access to a consumer market of over 20 millions inhabitants and is the 2nd largest country in Central-Eastern Europe after Poland and the 7th in the EU according to population.
Romania has a favourable geographical location, being situated at the crossroads of the important traditional trade routes. The country has access to river and sea traffic; Constanta is the biggest harbour and the Danube Channel offers exit to the Black Sea.
The capital, Bucharest, is located in the south-eastern part of Romania and has a population of over 2 millions inhabitants.
Since 2000, the government has implemented macroeconomic policies which are supportive of growth. A disciplined fiscal policy, which complemented a tight monetary policy and was augmented by strong advances in structural reforms, led to improved financial discipline in the enterprise sector and has placed public finances and the financial system on much firmer footing.
The last years displayed a good track record in consolidating the macroeconomic stability while lowering inflation. At an average rate of about 5% per year, GDP growth is among the highest in the region with a peak of 8.3% reached in 2004.
Romania: Investment Opportunities
Having a lot to offer in terms of natural resources (oil, gas, coal, wood, mineral waters – actually Romania comprises 30% of the mineral waters of Europe – and many other) and having sectors with great potential of development, Romania represents an attractive destination for investors, in the last years these coming mostly from Western Europe. Year 2006 represented a record in terms of volume of foreign direct investments in Romania (9,082 billion euros, according to The Romanian Agency for Foreign Investment).
The leading investors in Romania are Austrian companies (OMV and Erste Bank acquired the two biggest companies in Romania – Petrom and BCR) followed by French, German, U.S. American and Italian companies. The most attractive sector for investors until now has proved to be the industrial area (50.6% of the total FDI) – production facilities for telecommunications and automotive components, wood processing, packaging, construction materials, household products and food processing have been established –, followed by services (26%), trade (13%), transportation (6.4%), constructions (1.6%), tourism (1.5%) and agriculture (1%) (National Trade Register Office, 1990-2006).
Privatisation processes are already advanced. However, there are companies still on the privatisation list such as the two airports of Bucharest, CEC (Romanian Savings House), Romanian National Post, along with companies mostly from energy and production sectors.
Industrial and logistics parks have been created and developed over the last years in order to support industrial development in areas of interest for foreign investors. In this respect they have been located nearby well-developed cities all over the country and especially in western and central part of Romania (Timisoara, Arad, Sibiu, Cluj, Brasov).
Romania is becoming a favourite destination for the companies active in business processes outsourcing services from all over Europe. Being considered a nursery of talents and taking into account its technological and modern communication environment, all these transform Romania in one of the major players of Europe in the BPO business. A big number of international suppliers of outsourced services and also the top 10 players have already opened their centres in Romania.
Romania has beautiful landscapes (mountains, long sea coast) and, being a country which has been inhabited since earliest times, having numerous historical places and medieval towns. Therefore tourism is expected to develop in the coming years. The City of Sibiu, declared European Capital of Culture in 2007 and situated in Transylvania, is an important Romanian industrial, commercial, cultural and tourist center and preserves even today the mark of a medieval town. Brukenthal Museum from Sibiu is the oldest museum in Romania and among the first in Europe. Open for public in 1817, it has departments of art, history, natural science, folk art, as well as a library with valuable books.
The real estate market has boomed in Romania lately and major foreign developers have entered the market. Due to migration of population towards big cities and especially towards the capital, Bucharest, a strong shortage of new office spaces and apartments has arisen. This led to constant increasing of prices for both apartments and land, which is anticipated by specialists to grow as well in the coming years.
Along with the increasing of purchasing power of the population, major international retail players have either already entered the Romanian market or are about to do so.
Due to strategic geographic location of Romania, together with the possibility of finding qualified managers, many foreign companies have already established in Romania their regional headquarters offices for the Balkan Peninsula and/or south-eastern European markets.
Romania: Education, Personnel and Labor Market
Romania is already known for its skilled and ambitious personnel. According to the Romanian Institute for Statistics 16.3% of the population has a university degree. Characterized by cultural and ethnic diversity, in Romania the most spoken foreign language is English, followed by French, and in a lower degree also Italian and Spanish. German speaking people are available to a lower degree and the majority of Hungarian speaking people are mostly in Transylvania.
Employees in Romania can be characterized by adaptability, hard-working attitude and ambition to enhance their knowledge and develop from a professional point of view. This enabled for young professionals to advance to higher positions within international companies in a quite short period of time. Due to all these reasons multinational companies entrusted Romanian employees with top managerial positions with regional responsibility and in the last years there are more and more Romanians allocated with international assignments.
The country develops rapidly, the economic climate is improving and the labour market is tending to stabilize. As a result the big employers need to adapt and implement also in Romania their group policies referring to personnel retention. The increasing need of specialists in this area makes the search for qualified people sometimes difficult, depending on the field of activity. For example the difficulties can be mentioned in finding finance-accounting personnel, sales engineers, real estate specialists, insurance professionals and human resources specialists.
As a consequence of the overall economic growth the salaries have increased as well, the ones for the top managers being comparable to those in western countries.
According to the law 12 monthly salaries per year are paid in Romania, more can be agreed upon as bonus. Income tax for personnel is flat at 16%. The calculation of taxes for the employers depends on various aspects, such as field of activity of the company, number of employees, etc.
The social security contributions are calculated according to official annual lists and are between 29% and 39% for the employers and 9.5% for the employees.
Romania: Competent on-Site Personnel Consulting
HILL International Romania has one of the largest HR consulting teams on the market since 1992. Clients benefit from the extensive knowledge and experience of the high-educated team of consultants and psychologists, speaking English, French, German, Hungarian and Turkish.
Under the management of Country Manager Andries Verder and Managing Director Monica Vrabiescu, HILL Romania posses extensive international business and project experience as well as expert knowledge. The Romanian team has executed large and complex projects in the fields of recruitment, personnel assessments, organizational evaluation and development. Some of them represent pioneering projects on the Romanian market.
As a one-stop-supplier HILL Romania offers a wide range of human resources related services, among them executive search and selection, HR audits, management audits and outplacements as well as HR administrative services such as payroll administration.
HILL Romania is assisted in this process by the experience and expertise of the HILL Group. Over 30 years of personnel and management consultancy, scientific methodology, and an extensive network in Europe and central Asia enables HILL to provide successful consultancy in the areas of personnel and management for numerous firms in diverse branches.
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HILL International Romania Bucharest | Oradea Monica Vrabiescu, Managing Director Phone +40 21 230 78 96 E-mail hill@hill.ro www.hill.ro |
