The restructuring of the public sector by cutting the number of employees by 200,000 that the government announced was actually the outcome of people naturally going into retirement and not of layoffs, reveals a ZF analysis.
Every year, 160,000 to 170,000 Romanian employees out of the existing 4.2 million retire, most for them for reaching the pension age, while others retire early, according to the data provided by the National Pension House.
Considering that 1.2 million of the 4.2 million employees in the Romanian economy work in the public sector, the annual number of those who have retired since 2009 stood at almost 50,000 a year, that is 28% of the yearly total.
As a result, out the 200,000 said to have been fired from the public sector, three quarters, that is 150,000, simply went into retirement. This is very different from the situation in the private sector, where 700,000 jobs have been cut since the beginning of the crisis until now as companies were quick to react to the revenue drop by adjusting the number of employees first.
“I don’t think there were any layoffs in the public sector, I haven’t heard anything about it. The number of employees went down because many retired or found a better job somewhere else. That’s how money was saved, by not hiring someone unless seven left,” a high-ranking public official attending the talks with the IMF confirmed.
The Finance Ministry says that the data about the number of positions filled in the public sector show that the number of employees has gone down from 1.4 million to 1.2 million over the last three years.
Public sector jobs meant security and quite high annual raises for many years and the people working there got used to putting job security before promotion opportunities. A higher number of people laid off from the public sector should have, at least in theory, led to a lot of interest in private sector jobs, which did not happen.
“When it comes to the massive layoffs in the public sector, especially last year or two years ago when the salaries were cut, we would have expected to see an avalanche of candidates from this sector, yet it did not happen,” said Monica Dona, the PR&Marketing manager with recruitment firm Lugera&Makler, the leader of the local market.
However, there are also opinions to the contrary.
“Even though this cut in the number of public sector employees came as a result of the 1 to 7 rule (one hired after seven leave i.e.), I believe that the result was beneficial, and translated into both savings for the budget and an increase in the productivity of the employees left, because the institutions had to reorganize their activity,” said Marian Sarbu, former labor minister for PSD (Social Democratic Party). “Yet I know for a fact that some ministries did lay people off.”
This week’s government meeting discussed about exempting certain categories of public sector employees from this rule, such as physicians to prevent them from leaving the country in droves.
“The most affected by the natural departures from the public sector were the education and the healthcare because hiring was frozen there despite the high volume of departures,” said Bogdan Hossu, chairman of the union confederation “Cartel Alfa”.
He estimates that 30% of the 200,000 public sector employees no longer showing in statistics were actually positions funded by the budget but not filled by anyone. As for the remaining 140,000 half of the people were laid off and half left for natural reasons.
“This process will continue until 2017, as the target agreed upon with the IMF is 950,000 employees in the public sector as a result of the one hire per seven departures rule. The final goal is to have the share of salary spending reach 6.8% or 6.9% of the GDP,” Marian Sarbu said.
(English version by Loredana Fratila-Cristescu)