53% of employees expect their salaries to increase this year, and 40% plan to look for another job if this does not happen in the context of rising inflation, according to a survey conducted by Undelucram.ro, Romania’s largest online employee community.
The survey was conducted in December 2022, and 3,834 employees and 446 employers (HR specialists) responded. Respondents belong to IT, retail, finance-banking, BPO & services, telecommunications, consumer goods manufacturing, health services, industrial manufacturing, HoReCa, hydrocarbon/energy manufacturing-transport, scientific/technical services, construction/furniture, media&culture.
One-third of employees would need a 20-30% pay rise
Around 27% of employees say they would need a 20-30% pay rise to make ends meet, 20% need a 10-15% pay rise, and about 19% need a 15-20% increase. On the other hand, about 7% of respondents said they would like a pay rise of more than 50% to meet ends. At the same time, 6.5% of employees said they would make do with their expenses even if their salary did not increase this year.
If their salary does not increase, 41% of employees plan to look for another job, 19% will try a renegotiation with their direct manager, 13% will look for additional collaboration or a second job, and 9% will appreciate other benefits. Some 19% don’t have any plans in case they do not receive a higher salary this year.
Approximately 35% of employees say their salary grows annually, 28% only due to renegotiation, 19% of employees have higher wages based on performance, and 12% say their company only increases salaries annually for certain positions. Nearly 2% of respondents answered that they get a higher salary every quarter and 5% every two years.
8% say they will do very well even if they don’t get a pay rise
If they don’t get a higher salary this year, 29% of employees say they will manage but will make minor adjustments – go on fewer holidays, buy some cheaper products. Around 23% think they will manage, but only if they make considerable adjustments – they will stop buying new clothes, choose private label products as often as possible, pay close attention to utility costs (energy, water).
17% think they will find it very difficult to get by because the bank rates and other significant expenses already account for a lot of their monthly income. Around 13% say they will find it challenging to get by even if they have no installments because their salary is relatively low and they have no growth prospects. 10% say they will find it quite difficult to get by because installments represent a large percentage of the family’s monthly income, but their parents also help them. On the other hand, 8% say they will manage quite well and will not cut back on their expenses.
62% of employers plan to raise wages
Some 62% of employers plan to raise employees’ salaries this year, 21% only for specific positions, and 17% will not raise them.
Around 36% of HR specialists say that in the companies they represent, salaries will increase by 5-10%, about 22% say the increase will be 5%, and in 17% of companies it will be an increase of 10-15%. About 2.5% of HR experts mention a 30-40% increase in the companies where they work.
Also, 52% of employers say that the salary increase they want to make is a part of the annual plan to keep their employees motivated, 28% want to do so because of the economic context, 17% because of labor market dynamics, and 2.5% because of the company’s outperformance. Around 5% want to increase staff salaries for other reasons.
Many of those who will not increase salaries have decided to do so because they want to reward their employees in other ways – 39%. Around 28% will not increase wages because the company’s financial situation at the end of 2022 does not allow for a salary increase, 17% because of the whole macro-economic context and 17% because the companies in which they work increase salaries only following employee-employer negotiations.
HR experts believe that salaries should be increased according to performance
When asked what employers should do in the current economic climate, half of the HR professionals believe that salaries should be increased according to performance. 17% think employers should create other ways to increase employee engagement, well-being and performance even if they do not increase salaries (e.g., offer different vouchers for different types of services, courses and training).
On the other hand, 11.5% believe that companies should increase the salaries of all employees directly in line with inflation. Also, 11% think that they should raise everyone’s salaries according to the company’s annual policy, and the same percentage believe that employers should let go of non-performing employees and increase the wages of those involved.
“We observe in this survey a pertinent expectation from employees to have higher salaries this year given the economic climate and also a similar intention from companies. We also observe the attention of the HR specialists that the increasing salaries to be proportionate to the macroeconomic situation but also the performance of employees. It is worth noting that employers are thinking of different ways to motivate their employees even if they cannot afford a salary increase”, says Costin Tudor, founder and CEO of Undelucram.ro.