Press Release
November 13th, 2024
Bucharest
ABSL 2024 Report: Rising Labour Costs, Recruitment Process, and Retaining Experienced Employees are the Main Challenges for Business Services Companies
November 13th is the date of the 12th edition of the ABSL (Association of Business Service Leaders Romania) Annual Conference, the largest event of the business services industry. “Innovating Tomorrow. Charting New Courses in Business Services” is the theme of this edition, which gathers over 600 specialists. The topics covered include the implementation of the latest technologies, the launch of salary and market reports, the presentation of case studies and trends, as well as HR industry news.
According to ABSL data, all companies reported salary increases this year, and the estimated growth percentage for next year is approximately 6.7%. The average gross monthly salary of a software developer is around RON 18,700. A payroll specialist earns an average of RON 9,900 gross, while a procurement specialist receives RON 9,300 gross per month. Over the past 5 years, salaries in the industry have seen an increase ranging from 48% to 71%. The highest average gross salaries, around RON 13,000 per month, are recorded in Bucharest, followed by the region Transylvania/Banat with almost RON 11,000 gross/month, Muntenia with approximately RON 10,000 gross/month, and Moldova with RON 8,300 gross/month.
The benefits provided by companies continue to be significant for employees in the industry, but fiscal measures in 2024 have shifted employees’ preferences. The most commonly used benefits now include additional vacation days, flexible working hours, health insurance, and flexible benefits platforms.
From a labour cost perspective, Romania is more attractive compared to Poland, the Czech Republic, or Slovakia. However, Bulgaria and Hungary remain more competitive due to their lower costs.
“The rise in labor costs is eroding the competitive cost advantage, which used to be one of the reasons industry investors chose Romania. Soon, even foreign languages will no longer represent a competitive advantage. Employee professional development to implement and use Artificial Intelligence and automated processes could now make the difference. In general, increasing professional competencies to create higher-value-added services will contribute to keeping Romania in the top of investors’ preferences,” says Ciprian Dan, ABSL President.
The economic and geopolitical context has reduced individual mobility in the industry, leading to a normalization of labour market relations, which had become extremely difficult for employers in recent years. According to the ABSL report, the average turnover rate last year was 16%, with employees having an average age of 33 and spending approximately three years in a job.
“Recruitment, however, remains a challenge in the outsourcing industry. According to our statistics, this year HR departments reviewed 30% more CVs compared to the previous year to hire the same number of graduates. In the case of experienced employees, specialization in certain fields combined with expertise in digital areas (automation, RPA, artificial intelligence) will bring them significant career development advantages,” says Catalin Iorgulescu, ABSL Vice President.
According to ABSL studies, 77% of surveyed companies reported an increase in turnover in 2023 compared to 2022, but only 58% of them expect growth in the future.
“Poland, Hungary, and Slovakia offer investors numerous advantages for creating new jobs. Romania had a relatively competitive program of grants and fiscal incentives that contributed to the steady growth of the business services industry in the past, but this was interrupted due to budgetary constraints. The lack of fiscal measures to support the development of the industry could negatively impact the sector’s growth, the creation of new jobs, and the retention of specialists in the country,” says Cătălin Iorgulescu, ABSL Vice President.
The business services industry in Romania ranks 5th in terms of contribution to GDP, with over 200,000 employees. The main cities where this sector is developing are Bucharest, Cluj, and Iasi, followed by Timisoara, Sibiu, and Brasov. The main services provided, based on the number of employees, are customer operations, IT, and finance accounting.