According to the Smartree Workforce Index, a study conducted by Smartree, a leading HR outsourcing company in Romania, salaries in the private sector increased by only 3% in 2020 compared to 2019, against the backdrop of the ongoing pandemic. Meanwhile, employee benefits decreased by 16%.
The Smartree Workforce Index also shows that overall employee well-being dropped by 17% last year compared to 2019.
 Impact of the Pandemic on the Labor Market
The pandemic caused significant changes in the labor market last year, with the most notable being the shift to predominantly online work where possible. Certain sectors faced increased challenges due to imposed restrictions, such as the hospitality and tourism industries, or due to a global decline in demand for certain goods and services, as seen in the oil and automotive industries.
The economic situation, employment levels, and salaries fluctuated significantly last year, influenced by support measures such as technical unemployment and the option to reduce working hours.
 Job Market and Salary Trends
The SMARTREE WORKFORCE INDEX, which analyzes over 250 partner companies across various industries (retail, pharma, medical services, automotive, construction, industrial production, oil & gas, agriculture, insurance & financial services, logistics), indicates a 5% increase in job openings in certain fields in 2020 compared to 2019. This growth is attributed to major employers in sectors like food retail, online retail, FMCG, courier and delivery services, and software & technology, which significantly expanded their workforce.
However, according to data published by the National Institute of Statistics, the national unemployment rate increased, surpassing 5% in the second and third quarters of last year, compared to an average of 3.9% in 2019. The rise in unemployment was driven by reduced activity in sectors like hospitality, tourism, industrial production, automotive, and fashion retail.
 Decline in Employee Benefits by 16% Last Year
Employee benefits, which can include financial bonuses, meal vouchers, life insurance, medical subscriptions, fitness memberships, transportation reimbursements, or vacation and wellness bonuses, remained at the same level as 2019 during the first quarter of 2020. However, they steadily declined from April to December, with a drop of 30% in the third quarter compared to 2019.
The value of these benefits decreased due to projects and investments for 2020 being put on hold or postponed, including budgets for employee rewards. Additionally, certain benefits became inapplicable in the context of remote work, such as transportation reimbursements, car allowances, lunch expenses, or relocation bonuses.
It is estimated that the value of most types of benefits decreased last year, with exceptions for meal vouchers, which increased by 9% compared to 2019, and medical and life insurance subscriptions, which saw a nearly 40% increase.
Despite the economic uncertainty, salaries maintained a slight upward trend of +3%, primarily due to the increase in the gross minimum wage at the beginning of the year—by 7% for those with medium education and by 13% for those with higher education. This modest salary growth reflects the general concern among companies to maintain employees’ salary levels at pre-pandemic values, with salary cuts applied only selectively and temporarily, depending on the impact on operations and financial results.
 Significant Drop in Vacation Days Taken
The most significant declines were observed in the number of vacation days taken, which fell by nearly 18% compared to 2019. This was one of the steepest declines in recent years, with the most substantial drop of 47% occurring in the second quarter.
The decrease in the above indicators contributed to a 17% drop in Employee Well-being, a metric directly correlated with company-provided benefits and vacation days taken by employees. In contrast, the Economic Condition Index, associated with job numbers and employee salaries, slightly increased by almost 5% compared to the same period last year.