Local salary growth decelerates

Newsroom 04/08/2015 | 09:32

Managers and experts working in fields such as IT, engineering, sales & marketing, crude oil and natural gas extraction have the winning tickets on the labour market at the moment, commanding the highest salary. At the opposite pole are those working in hotels and restaurants, security and production. As expected, Bucharest still tops the regional salary league.

Otilia Haraga

“Over the past two years, salaries have risen by between 3 and 5 percent, depending on the industry and seniority level, according to the Mercer Salary Survey. In 2015, we predict average salary growth of 4.5 percent, down from 5 percent last year,” Roxana Feregan Marin, consulting manager at Consulteam Romania, tells BR.

She adds that salaries have climbed across all sectors, but the degrees differ from one industry to another. “However, we have identified so far that 3 percent of companies have frozen salaries this year and are no longer giving their employees raises,” she says.

Bucharest still tops the list of the cities with the highest salaries. The capital is followed by Ilfov and Ploiesti, and by cities in the west and center of the country – Cluj-Napoca, Timisoara, Sibiu and Brasov. More and more IT&C and BPO companies, shared service centres and automotive firms have opened branches in these towns, boosting the standard of living and employment opportunities, say pundits.

The average gross salary in Romania totalled RON 2,500 in May 2015, 2.5 percent down on the previous month, according to data from the National Institute of Statistics (INS). The average net salary per month stood at RON 1,806, down by 2.7 percent or RON 51, against the month before.

Employees working in the extraction of crude oil and natural gases earned the highest salaries in May, of RON 6,523 net on average. At the opposite pole, employees in hotels and restaurants made on average RON 1,018 net.

Compared to May 2014, the net average salary increased by 7.4 percent, according to INS data. However, in May 2015, the average net salary was lower than in April, due to bonuses and gift vouchers granted in April and also production yield and higher profit on some contracts.

The most significant boost in the average net monthly salary, at 29.7 percent, was netted by crude oil and natural gas extraction employees. There were also hikes of between 4.5 and 8 percent in the net monthly salaries of employees working in cokery production and the manufacturing of products coming from the processing of oil, sylvan and forest exploitation (including fishing and aqua-farming), extraction services and air transport.

Last but not least, there was 3 to 3.5 percent growth in the pay of employees involved in activities that are auxiliary to financial intermediations, insurance and pension funds, terrestrial transport, pipe transport, cinema and video production and television programs.

“At a glance, the answer comes naturally: people working in top management positions earn the most on the Romanian market. However, there are certain expert or specialist positions in some fields able to command as much as managers in multinational companies. For instance, at the moment, the IT&C market is fiercely competitive: a Java developer can earn a gross salary of between EUR 900 and EUR 2,400 per month, depending on seniority,” says Feregan Marin.

Firms are currently especially looking for specialists in engineering, sales and marketing, and IT. “Companies are facing difficulties when they must recruit both specialists and managers in the same field,” adds the Consulteam representative.

In the private sector, employees’ packages can extend way beyond the salary. Employees benefit from life insurance, medical services at private clinics, subscriptions to sports and health clubs and training programs.

“The Romanian market has greatly developed in this direction and both companies and employees are placing more and more focus on the benefits package,” says Feregan Marin.

The higher demand for IT&C specialists has generated fierce competition in this area of the labor market. As a result, benefits packages are becoming more and attractive, found the IT&C salary survey carried out by Consulteam.

The Mercer survey on salary growth in the first half of the year looked at the pay of developers of programming languages such as Java, .Net, C++ and PHP. It found that salaries in the IT&C sector have grown on average by 4.5 percent. A similar hike is expected next year.

Overall, salary rises in the sector exceeded the 2.2 percent inflation rate.

At regional level, outside Bucharest, Cluj-Napoca has been of increasing interest to IT&C employers. Even though salaries in the capital are still higher than in other cities, the gap is gradually narrowing. Right now, a Java developer in Bucharest commands an average of 18 percent more than her counterpart in Cluj-Napoca.

“In the IT&C industry, apart from the usual benefits, there are some less common ones, compared to other sectors of activity, such as: an in-house cafe, fresh fruit and beverages, gaming areas, modern headquarters conceived to feature relaxation and socializing spaces, catering or a dedicated chef for lunch, parties and team building sessions and investments in CSR projects selected by employees,” Feregan Marin tells BR.

The most significant drops in net average salary were suffered by individuals working in insurance and pension funds (except for the public social insurance system), where salaries decreased by as much as 15.7 percent, according to INS data.

Slumps of between 10.5 and 13 percent hit remuneration across the financial intermediation area (except for insurance and pension funds), manufacturing, other means of transport, the collection and purification of used water, metal ore extraction, coal extraction and the manufacturing of other non-metallic mineral products.

Employees working in the production and supply of electric and thermal energy, gas, hot water and air conditioning, beverage manufacturing, the metallurgic industry, water transport, telecommunications, water treatment and distribution, and professional, scientific and technical activities also endured pay cuts of between 6.5 and 8.5 percent, according to INS figures.

These came because production plans were not achieved or revenues were lower, while in some sectors of the economy, staff members were hired on very low pay.

“The jobs with the lowest salaries include cleaners, production workers, people who stock merchandise and guards. Their pay starts from the minimum gross salary, which is RON 1,050, and can reach RON 2,200 per month,” Feregan Marin tells BR.

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