The construction industry requires both fiscal predictability and skilled workforce
The construction sector holds significant importance in the Romanian economy, as it contributes to economic growth, job opportunities, and infrastructure development. In a proactive approach to support and enhance the construction industry, the Government recently convened a working meeting with employer associations. The primary goal of this meeting was to facilitate constructive discussions and identify necessary actions to further promote and strengthen this vital sector within the Romanian economy.
During the meeting, a range of significant topics related to the construction industry were addressed. The Romanian Association of Construction Entrepreneurs (ARACO) actively participated in the discussions, emphasizing the aspects that mirror the sector’s concerns and requirements, with the goal of enhancing working conditions and legislation within the field.
As members of ARACO, we attended this working meeting, where we were represented by Mr. Bogdan Pândaru, Deputy General Director of INSPET. He put forth a series of agenda items that centered around the lack of fiscal predictability and the repercussions of the shortage of specialized personnel on the stability and growth of the construction sector.
Promoting investment and economic growth
In order to stimulate growth and support the construction industry in the midst of economic challenges, it is crucial to maintain a reduced labor tax rate for companies in this sector. Industry associations are urging the preservation of fiscal incentives for construction, at least at the current threshold level, which has been lowered to one-third of the initially announced rate for a period of 10 years. The representative from INSPET is of the opinion that with fiscal stability, companies will be more inclined to expand their operations and undertake new projects, resulting in job creation and increased consumption.
Moreover, maintaining a reduced labor tax rate for the construction sector alleviates the fiscal burden on construction companies and enables them to compete in the market. This allows companies to allocate more resources towards research and development, contributing to technological advancements and the creation of innovative solutions in the construction field. Indirectly, it also contributes to infrastructure project development.
The legal aspect of fiscal predictability is also highly important. By maintaining a reduced labor tax rate, it helps combat the underground economy within the construction sector. Companies will be incentivized to operate legally and pay the required labor taxes, rather than avoiding tax payments through illegal or undeclared activities. Last but not least, a lower labor tax rate for construction companies can attract foreign investment to the sector. Foreign investors view this measure as a stimulus to expand their businesses in an economy with a favorable fiscal policy for the construction sector.
To summarize, Mr. Bogdan Pândaru, Deputy General Director of INSPET, asserts that “preserving fiscal incentives for construction companies is a vital catalyst for sectoral development and comprehensive economic support. By maintaining favorable fiscal policies, the government can guarantee the sustainable expansion of the construction industry, fostering its contribution to infrastructure development and the generation of employment opportunities”.
Specialized workforce, a necessity!
In 2020, the Romanian construction industry achieved a milestone with a record-breaking number of 416,000 employees, marking a peak in employment. However, two years later, due to the rapidly growing labor demand, Romania is now importing workers (particularly from Asia) at a staggering 400% increase compared to 2021. With numerous projects underway in Romania, there is a pressing need for a dedicated, reliable, and responsible workforce.
The shortage of specialized personnel in the construction sector can have significant effects on its stability and development. The most noticeable impact of the lack of skilled workers is a decline in productivity, as inexperienced or inadequately trained laborers may struggle to efficiently and effectively execute the tasks at hand. The absence of experience and technical knowledge can lead to project delays or the need for rework due to inadequate workmanship, consequently resulting in increased construction costs.
Construction companies are forced to hire additional workforce from abroad or subcontractors to compensate for the lack of skilled personnel. This can involve additional costs related to salaries, training, and managing the labor teams. When the need arises to bring in specialized workers from other regions or countries, apart from the expenses associated with documentation, transportation, and accommodation, cultural differences also need to be taken into account, which should not be overlooked.
In Romania, we have reached a point where there are projects and works, but there is a lack of available qualified Romanian workers to carry them out within the required deadlines set by suppliers. There are three directions that we observe: 1. active Romanians who have migrated to the West to work, and 2. the lack of internal motivation among young people in Romania to work in fields considered physically demanding (although it should be noted that working conditions in the construction industry have significantly improved over the past 20 years, including the use of machinery and equipment, as well as accommodation conditions when personnel are temporarily relocated to different construction sites), and 3. the lack of a coherent macro-level strategy concerning education and guiding young individuals towards sustainable professional training.
Furthermore, the absence of qualified workers, foremen, and mentors can impede the integration of technology and innovation in the construction industry. Without a workforce trained in utilizing innovative practices, companies may exhibit reluctance to adopt changes or enhancements in their operational procedures. This can realistically hinder the sector’s progress and development.
To counteract these negative effects, increased attention is required in terms of professional training and promoting careers in the construction industry. Investments in training and educational programs, fostering partnerships between companies and educational institutions, and encouraging young individuals to pursue careers in construction can contribute to alleviating the shortage of specialized personnel and ensuring the stability and sustainable development of the construction sector.
“We need to start with education!”
We believe that education is crucial for the future of the construction industry. With over 30 years of experience in the field, we actively support partnerships within our community, particularly in the area of education.
Many employees in the construction industry acquire their qualifications on the job. However, technical schools and dual vocational education systems also exist, and their role in the educational process should be recognized.
In theory, through dual vocational education, students have the opportunity to directly integrate into the construction industry by working alongside professionals and gaining practical experience in a real work environment. This approach allows students to understand the actual requirements and needs of the construction sector and adequately prepare for employment in this field. They acquire practical and technical skills necessary to become skilled workers and can effectively contribute to the development of the construction industry. However, in practical terms, the situation is disappointing, and we make this statement based on our own experience.
Regarding dual vocational education and skilled workers
“First and foremost, we need to focus on the future, and that starts with education! Through these education partnerships, we strive to build a strong bridge between theory and practice, promote innovation, and shape the future generation of construction professionals. We firmly believe that investing in education is the key to development in our industry, and we are determined to actively contribute to this progress.
As an active participant in the dual vocational education project, we offer students the opportunity to develop their practical and theoretical skills through internships within our company, supported by scholarships. Moreover, we provide them with a real chance to become part of the permanent INSPET team. This program allows them to gain valuable experience and prepare for a successful career in the construction industry. The project has been developed over several years in collaboration with the “1 Mai” Technical High School in Ploiești and the Ploiești City Hall.”
In collaboration with teachers and INSPET’s experts, we provide guidance and mentorship to student scholarships, granting them the invaluable opportunity to acquire practical experience and enhance their skills in an authentic work setting – at the VEST Industrial Platform. Our commitment to supporting the next generation of skilled professionals couldn’t be more tangible, as evident through our scholarship and internship program.
However, our efforts extend beyond this. We have established a partnership with the Faculty of Oil and Gas at the Petroleum-Gas University in Ploiești, offering valuable assistance to students through internships and research projects. Our aim is to foster the development of technical and theoretical competencies among aspiring engineers and construction specialists, thereby making a significant contribution to the growth potential of our industry” – Mr. Bogdan Pândaru, Deputy General Director of INSPET, emphasizes these endeavors.
In all these partnerships, on our part as an employer, the efforts are sustained and involve allocating material resources, training facilities, and instructional staff. However, the results have not met our expectations.
Moreover, this type of education should involve close collaboration between schools/teachers and companies in the construction sector. It is essential for educational institutions and companies to work together to develop relevant programs tailored to the real needs of the industry. As a company, we can provide technical expertise, facilities, and mentors for students, offering them the opportunity to familiarize themselves with the work environment and learn from practical experience. After years of study, graduates, who are already acquainted with the industry and possess practical skills, become attractive to employers and can immediately contribute to the activities and projects of companies. This approach would significantly reduce the shortage of specialized personnel and support the stability and development of the construction sector.
Unfortunately, in practice, the situation is quite different. We do not generalize, but many of the students in this educational model are not genuinely interested in learning a trade. They enroll solely to receive a scholarship, while teachers struggle to establish themselves as authorities. Moreover, the fact that some students frequently skip theory or practical classes within the company providing their scholarship raises concerns about the quality and validity of the entire system. If only private companies make efforts, and teachers, supervisors, and parents do not actively contribute to motivating and guiding these children towards “learning a trade and being responsible,” good results cannot be achieved, and over time, companies will cease to support such a system.
Regarding foremen and their role in the direct collaboration between engineers and workers on construction sites
“At present, the lack of quality specialized education affects us by the inability to produce foremen who play the role of the link between engineers and workers. Traditionally, foremen were individuals who emerged from the ranks of skilled workers, possessing practical skills and serving as mentors for both engineers and workers. Personally, I learned the practical aspects of the construction site from foremen after graduating from university. Graduates of this type of education should acquire not only technical competencies but also cross-cutting skills such as problem-solving, effective communication, and teamwork to adapt to the evolving changes and requirements of the construction sector,” said Bogdan Pândaru, Deputy General Director of INSPET.
The system of educational institutions that guarantee both the acquisition of specialized technical knowledge and the practical know-how of everyday tasks is not well-developed. Although there are construction companies willing to financially support those who wish to qualify in specific trades within the sector, providing them with secure job placement upon graduation, the results are very poor in terms of developing quality education. “Today’s vocational schools produce skilled workers, but that alone is not enough. We need foremen and dedicated individuals willing to work hard and take on responsibilities. We need an education system that ensures a higher level of training beyond that of skilled workers because the construction field greatly requires individuals at this level,” added Bogdan Pândaru.
We are involved in constructing strategic objectives, including industrial and civil buildings, fluid infrastructure, and other significant utility projects. We understand that it is the younger generations for whom we are building, and we have confidence in the future. Consequently, we strongly support vocational education and actively contribute to developing the skills of young individuals in high-demand trades within the job market. We provide employment opportunities and offer training for stable careers with genuine growth prospects. To learn more about the career opportunities we offer, please visit: https://www.inspet.ro/careers.
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If you’re considering a career opportunity with INSPET, we encourage you to explore our dedicated Careers page at www.inspet.ro/careers. On this platform, you’ll discover valuable insights about current job openings and the application process. We welcome you to join our team, share the same values (professionalism, teamwork, responsibility, integrity), and contribute to the success and development of the construction industry in Romania.
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