Salaries in the private sector went up by 5 percent this year, PwC study shows

The average salary increase rate in the private sector in Romania was of 5.1 percent this year, according to the 2011 edition of the PayWell study conducted by the HR Consulting department of PwC Romania.

 Although the salary increase rate is higher than in 2010, when it amounted to 4.3 percent, the real level of growth was below the projections made at the beginning of the year, when companies were aiming for an average salary increase of 6.8 percent.

 According to the results of the study, almost half of the participating companies have already performed salary increases in 2011 while one third plan to implement them by the end of the year.

 However, 23 percent of the participating companies either do not plan to increase wages or have not made any decision in this respect.

 “One notices that those sectors  having collective labor agreements in place, which correlate  the salary increase rates with the inflation level, (such as industrial products or the automotive industry), were also the ones that operated the highest salary increases in 2011,” stated Peter de Ruiter, Partner, Tax and Legal Services Leader, PwC Romania (pictured).

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 Almost 60 percent of the participating companies have budgeted salary increases for 2012, with an average rate of 6.8 percent.

 “Industrial sectors that have navigated safely through the economic crisis, generally the ones having a large export component (such as industrial products and automotive), reported above average wage increases, while industries that were deeply connected with the evolutions of the internal market (such as retail and financial services) reported modest wage evolution, below the forecasted inflation level”, added de Ruiter.

 According to PayWell Romania 2011 , the average salary increase in the automotive production sector was of 8.9 percent in 2011, in industrial products of 7.2 percent, while in retail, the average wage increase was of only 2.4 percent and in the banking sector of 2.9 percent.

 With regard to bonuses granted on top of the salary, PayWell Romania 2011 study concludes that 66 percent of the Romanian companies offer fix bonuses (independent of organisation’s and / or employee’s performance).

 In this case, there was a slight decrease in the number of companies that grant such bonuses in comparison to the past few years.

 Performance bonuses are granted mostly to employees in managerial positions. In 2011, companies have set a variable pay target of approximately two salaries, while the amounts paid have been around one salary and a half, more than in 2010, when the variable pay was of only one monthly salary.

 PayWell Romania 2011 salary and benefits study comprises compensation data provided by more than 150 companies across 9 industry sectors, these being automotive manufacturing; banking; food, beverage & distribution; industrial products; IT; leasing; pharmaceuticals, retail, outsourcing and service centers.
Otilia Haraga