Pwc: Around 40% of private companies expect higher salary raise next year

Around 40 percent of private companies in Romania estimate an average 6.8 percent raise in salaries in 2011, compared with an average 4.3 percent salary raise in 2010, according to a PayWell Romania survey on salary and benefits, conducted by PricewaterhouseCoopers (PwC). Around 70 percent of companies included in the survey either raised salaries so far or intend to raise salaries in 2010, while the rest have no intention to raise salaries in 2010 or haven't made any decision in this respect. Peter de Ruiter, Partner, Tax and Legal Services Leader, said companies have displayed remarkable similarity this year with respect to salary and benefits policy, considering that salary raises ranged from an average 2.9 percent, in the retail sector, to 5.9 percent in the IT industry. He also said this shows the fact that companies in Romania, regardless of their business core, remain cautious in the current economic context and have kept tight grip on costs, mainly staff costs. "We anticipate stronger pressures for wage increases in the near future, given the recent VAT hike from 19% to 24%, especially in the economic sectors that have a strong trade-union presence. Still, PwC does not expect much higher salary increases in 2011, taking into consideration the current economic environment and the balance between supply and demand on the labor market," Peter de Ruiter also said. The survey indicates that the highest salary raises in 2010 were registered in the IT sector (5.9 percent), the pharmaceutical sector (5.4 percent) and the auto sector (4.9 percent), while the banking and retail sectors saw salary raises of only 3 percent and 2.9 percent, respectively. Eemployees from private companies with turnovers of up to EUR 50 million and companies with less than 500 employees register the highest salaries, namely, gross wages of RON 3,237 (EUR 759) and RON 4,109 (EUR 964), respectively. On the other hand, a company with a turnover higher than EUR 300 million offers gross wage of RON 2,929 (EUR 687), while in companies with 501 up to 1,000 employees, the gross wage amounts to almost RON 2,377 (EUR 557). Depending on the region, on average, the gross wage in Bucharest rises to RON 4,039 (EUR 948) in 2010, while outside Bucharest, the monthly average salary amounts to RON 2,427 (EUR 569). Around 60 percent of the Romanian companies provide fix bonuses to all employees. These are granted mostly in connection with the winter holydays, Easter and the summer season vacations. The IT sector is the only sector where fixed bonuses are less frequent. These bonuses are usually offered as fixed amounts, ranging from RON 150 to RON 700. The performance bonus is a common incentive for management, being offered by three-quarters of the respondents to the PayWell Romania 2010, while also being used by more than half of the respondents for their operational and support staff. The planned level of the performance bonus ranges between 10 percent and 20 percent of the annual salary, with the highest levels being allocated to top management. Companies also offer sales commission. The average planned level of the sales commission is 40 percent of the annual salary for sales managers and 32 percent of the annual salary for sales representatives. In both cases, the actual payouts of the sales commissions of last year were lower than the planned level: 25 percent for sales managers and 20 percent for sales representatives. The survey polled 150 companies in nine fields of activity.