With a staggering 6% unemployment rate in June, cuts in HR budgets, salary freezes, mass layoffs in first quarter, and an acute lack of employment offers marked the first-half labor market climate.

Insiders' view

“I’m not very optimistic. I expect employees to further cut staff members as well as to optimize activity of the remaining employees”, said Mirela Marinescu, HR manager at human resources company APT Resources & Services.

In early 2009, managers and entrepreneurs had to face the economic reality – the crisis would soon erupt in Romania, aggressively impacting the operations of local and multinational companies. But an anti-crisis plan was created. Industry’s tycoons scaled back their expansion drive and decided to preserve the most profitable business lines, cutting and chopping every overhead expense that could send them out of business. At first, the companies cleaned up the flow-chart, and subsequently, laid off employees whose work was dispensable to the company. HR budgets suffered drastic cuts. The salaries of the remaining staff members were put on ice unlimitedly, as well as any employee perk.

Unfortunately, the market is expected to continue easing well into the second half. The 2008 profit that supported HR budget in the first half of the year will be dried out, triggering a new wave of layoffs. Unemployment rates will escalate, and will pass the 6% mark in July up to 9% by year-end, as economic analysts predict. The competition in the labor force coupled with executives’ reluctance to start recruiting will put salaries on hold. In the crisis-hit markets, pay packages could even start spiraling downwards. Recruitment drive will grind to a complete halt in second half, as HR specialists say.

“The recovery of HR advisory market is linked to every sign of life that the economy could show However, the recruitment servic