Translated material
What money is happiness?
In Russia, the popularity of salaries in euros and non-monetary forms of remuneration is growing
Most companies have planned salary increases for their employees in 2006, and Russian employers are ready to more actively use methods of non-salary incentives and move away from the craze for “dollarization,” according to the study “Review of Wages and Compensations for 2005,” prepared by the Human Capital group, part of member of the auditing company Ernst & Young.The study covered 96 positions in 109 Russian and foreign companies operating in 11 regions of the country. "Wages continued to rise in 2005, although growth was uneven and varied widely across occupations," said Tim Carty, partner at Human Capital. “Compared to previous years, there has been a significant increase in salary levels for almost all levels of employees, on average by at least 10-12%.” More significant increases were typical for customer service specialists, logistics specialists, as well as for risk management and internal control (auditors, accountants), adds Petr Zimovsky, manager of the Human Capital group.
As the researchers noted, there is a decline in the number of companies that set wages in US dollars. Only 35% of companies said they set salaries for all employees in foreign currency, which is 17% less than last year. Against this background, the euro is gradually gaining popularity—already 15% of the companies studied nominate salaries in this currency.
According to Ernst & Young experts, the labor market in Moscow, as well as in other rapidly developing regions, is on the rise, which is a consequence of the annual growth of Russia's GDP by 6-7% in recent years. And, despite the uneven pace of development of different industries, the Russian economy is still attractive for investment, which creates increased demand for personnel at almost all levels. In a survey, almost 60% of companies said they planned to increase the number of employees by almost a third within a year, and only 4% planned to cut staff.
The average monthly salary in Moscow, as the researchers found, is (before tax) for workers and support staff - $786, for administrative levels - $1,060, for middle management - $3,200, for senior management - more than 7000. In particular, according to the survey, technical director positions in Moscow earn an average of $5.5 thousand, a customer service manager and HR engineer earn about $2 thousand, and an information specialist technology - $1.6 thousand, junior accountant - just over $1 thousand. “Against the background of high employee mobility both in the market and within companies, it is not easy for compensation and benefits specialists to adhere to an adequate remuneration policy, which is especially complicated rumors of significant wage increases,” says Mr. Carty.
Both Russian and foreign companies are expanding the scope of their activities in the regions, but there remains a significant difference in salary levels between the center and the regions. If we take the average level of salaries in the capital as 100%, then in the Moscow region average salaries are 70% of Moscow, in St. Petersburg - 74%, in the Volga region - 59%, in Sakhalin - 79%.
Salary reviews usually happen once a year, and the majority of companies surveyed were found to have already planned a 10% salary increase for the following year.
In addition to the growth of wages, a number of other very interesting trends can be seen in the market. 94% of survey participants use some form of variable compensation. The vast majority of participants use a bonus system based on annual performance, in which the bonus ranges from one to one and a half monthly salaries.
Deferred compensation programs and bonuses based on employee performance are becoming increasingly popular. The most popular type of such remuneration is a bonus based on the results of work for the year. It turned out that the most popular basis for calculating and paying bonuses at the end of the year is the results of an employee’s individual work, and not the key performance indicators of a department or the company as a whole. The number of non-monetary benefits in compensation packages is gradually increasing: 96% of respondents practice medical insurance for employees and pay for mobile phone traffic, 83% of respondents provide cars to senior managers, 73% of respondents insure the life and ability of employees to work, 35% of respondents pay for food and use of the services of sports centers. In addition, there has been a recent trend to retain and motivate senior employees by providing them with the opportunity to directly participate in the share capital of companies.