Florin Drăgan, the rector of Politehnica University Timișoara (UPT): “The year 2024 will be dominated by caution among companies. Fiscal changes and global instability have already reduced the number of hirings.”

• IT&C and automotive companies in the western part of the country have already reduced hires, starting with the second half of 2023.
• This trend will intensify in 2024 due to upcoming fiscal changes, as well as the global instability affecting many of those companies.
• Florin Drăgan, the rector of Politehnica University Timișoara, sought to understand the prospects in the fields where the educational institution has the most graduates. Thus, he engaged in discussions with representatives of the largest companies in the western region of the country to gain a clear insight into the labor market.

Politehnica University Timișoara, at the initiative of Rector Florin Drăgan, continues to monitor labor market trends and collaborate with the private sector. That way, the university maintains a clear perspective on the fields the most students are trained in. Through continuous communication with industry leaders, UPT strengthens its commitment to being an active partner in the education and professional training of future generations of experts, according to the demands of the labor market.

“The IT&C field has been impacted in late 2023 by the fiscal changes which eliminated a part of the employee tax exemption. Many employers haven't covered this monetary difference that the employee no longer receives. Practically, we're talking about a wage cut, which is a primary sign that major companies have started to be more cautious. Moreover, budgets for non-essential expenses have been significantly reduced, and work meetings involving international mobility have also been cut down. All of this happened in the last six months, and the year 2024 will continue on the same path, especially since many large companies will pay the new turnover tax,” stated Florin Drăgan, the rector of Politehnica University Timișoara.

In recent years, companies in the western part of the country have announced investments totaling over one billion euros in new factories, modernization, and expanding local teams. Some of these investments have been implemented, while others are ongoing. However, numerous fiscal changes have conveyed a sense of distrust in the Romanian market, even reaching the central headquarters of multinational corporations.

“Speaking with top managers of companies in the western part of the country, fiscal instability has been one of this year's challenges. In recent months, human resources teams have cut down on recruitment, companies are not expanding their teams as extensively as they did in the past, and currently, they only hire experienced individuals for key positions where there is great need for talent. Some companies have announced plans to hire many people, yet it remains to be seen if they will follow through with these plans. The change in taxation for self-employed individuals is also problematic. Starting next year, it will no longer be profitable to work under this business structure, and we can expect many employees to work directly for foreign companies. This way, the state loses taxes derived from social security contributions,” continued Florin Drăgan.

Many IT&C and automotive companies face issues on a global scale, which may also impact the Romanian market.

“Major IT&C companies carried out layoffs globally in 2023. While this hasn't reached us yet, we're witnessing a cautious approach to new hires. It was felt at the end of 2023, but it will intensify in 2024. Moreover, recently, other multinational companies in the field, with headquarters in Romania as well, are facing financial problems globally. This doesn't necessarily lead to layoffs here but rather a halt in hiring. Even if we witness layoffs, experienced individuals will find a place in the market because we are facing another situation: due to the digitalization component of the National Recovery and Resilience Plan (PNRR), there might be more well-paid jobs, even in the public sector. Here, the main concern in attracting specialists will be the lack of trust that IT professionals face in public institutions,” declared the rector of Politehnica University Timișoara.

The construction industry, despite fiscal changes, remains the most stable

In recent years, Politehnica University Timișoara has experienced a constant increase in the number of young people interested in studying at the Faculty of Civil Engineering. The high demand in the labor market, as well as the salary growth in this field, have led to increased interest. Nevertheless, there is still a need for civil engineers, both in private, and state-owned companies. Major infrastructure projects carried out through the National Recovery and Resilience Plan have brought stability to companies operating in the Romanian market.

“In construction, although the residential market has been affected in the last year, there are many public investments being implemented nationwide, and there is still a need for workforce. Many companies bring workers from Asia, but we're talking only about laborers; civil engineers willing to emigrate here find it more challenging. Therefore, these companies will continue to seek our graduates. Currently, the demand for engineers in this field clearly exceeds the technical universities' capacity to train graduates, and the demand continues to grow,” concluded Florin Drăgan, the rector of Politehnica University Timișoara.