Frames Barometer: Companies refrain from hiring until fall, fear 4th Covid wave

The relaxation of pandemic restrictions amid the vaccination rollout and the significant decline in the number of Covid cases has brought just muted optimism to the economy and the labor market will not open until at least autumn, as the large majority of investors are waiting for the confirmation of the good news, reveals a barometer survey conducted by consulting company Frames at the commission of Best Smart Consulting, agerpres reports.

Thus, 57 percent of the managers surveyed in the Covid Labor Market Barometer say they will resume hiring in fall, while 32 percent say they will do so only in 2022, and just 9 percent say that they will hire in the next 3-5 months.

Asked what are the challenges that currently influence the labor market, most of the respondents (61 percent) indicated the uncertainty caused by the dynamics of the COVID pandemic, citing fears of the negative effects of a possible 4th infection wave.

Also, 21 percent of the surveyed managers say that they are not yet ready to hire because the company's activity is still reeling from the crisis, 16 percent say that they cannot find the right employees, and 7 percent say that they have restructured their activity in such a way that they no longer need additional personnel.

"The managers' reserved optimism shows that they have learned the lessons of the crisis. Many of them have restructured their businesses, optimized their costs and staffing plans, and development projects are being built much more prudently than in the past. Businesses will only gradually revert to maximum capacity, depending on the dynamics of the health crisis, the signals on the resumption of consumption and the general economic evolution, from the thawing of business relations to the dynamics of the inflation and exchange rate," said Ligia Neacsu, Best Smart Consulting general manager.

The Frames & Best Smart Consulting Barometer also provides an insight into the managers' salary plans for 2021 in the context of the crisis, with 68 percent of the surveyed saying that they will not raise wages this year, and only 12 percent responding 'Yes' to this question, while the rest avoided answering.

Of those who want to increase wages, 54 percent indicated an increase of 3-10 percent.

"In the context of the significant economic crisis the real economy is going through, wages remain a sensitive topic. Wages have risen and will increase, most likely in the sectors that have performed optimally in the pandemic, such as businesses related to healthcare, IT, food retail, construction & building materials. Otherwise, employees will have to make do with occasional bonuses or increases, depending on inflation and performance in the coming quarters," said Frames manager Adrian Negrescu.

Experts do not rule out wage cuts in the areas severely affected by the pandemic and which are expected to see a rebound only in the second quarter of 2022 at the earliest.

Regarding the criteria based on which companies will hire in H2 2021 and especially in 2022, 47 percent of the surveyed managers indicated professional training as the main employment criterion, 39 percent ticked the candidates' experience, 27 percent are interested in the required wage, and the rest of the answers refer to various other aspects from availability for long hours to work from home, transportation, etc.

"Increasingly more companies are looking for experienced people and are willing to pay adequate wages to sign up personnel with a solid professional training. The time of personnel trained on the job has passed, and the companies, facing increasingly strong economic challenges, are trying to land workforce capable of managing any situation,'' the barometer concludes.

"The move to digital accelerated by the COVID crisis has very much changed the Romanian economy and the labor market in general. Increasingly more companies are willing to work remotely, to optimize their personnel schemes so that the race for a well-paid job will get tighter. The good news is that lifelong training courses are back in the employment packages,'' said Ligia Neacsu.

The Frames Barometer commissioned by Best Smart Consulting was conducted between May 27 - 30, 2021 through online, telephone and email questionnaires, on a representative sample of 300 companies from various activity sectors - trade, financial services, agriculture, energy, ready-to-wears, IT, etc. A total of 1,763 people - entrepreneurs, company managers, middle and top management with higher education (58 percent men and 42 percent women, with an average age of 47) answered the survey.