Ernst & Young issues compensation and benefits survey report for 2009/2010
Moscow, 30 September 2009 - Ernst & Young, a global leader in assurance and advisory services, has issued its final report on the General industry compensation and benefits survey 2009/2010. Ernst & Young’s Performance and Reward group collected detailed information on new trends in HR policies and practices in Russia in the new economic environment, as well as on remuneration data for 300 cross-industry jobs. This year, 184 international and Russian companies of various industries participated in the survey.
“For a number of years in Russia, the average increases in salary levels exceeded the inflation rate. This year marked the turning point in cash compensation trends, which have shown a slowing in the growth rate of base salary. The survey data showed that the average salary increase was 6.4%, and this is significantly lower than the inflation rate for the respective period,” said Zhanna Dobritskaya, Partner in Ernst & Young’s Human Capital Group. In addition, the actual salary increase was less than half of that planned by employers in the middle of 2008.
The survey results show that the structure of the compensation package has undergone significant changes. In particular, the size of variable pay has decreased, especially for bonuses of top management, as the level of bonuses of this category of personnel is usually closely linked to a company’s financial results.
A little over half of the participants are planning salary increases for the following 12 months. The average planned salary increase is 10%.
In the current economic environment, many employers are reviewing their strategic development plans and introducing business process optimization and cost reduction programs. This applies to HR-related costs as well.
According to the survey, 40% of participants have reduced headcount. The average staff reduction was 11.5%. While more than 60% of the participants do not plan to change the number of employees over the next 12 months, one-quarter of the respondents indicated that they plan to hire more (compared to 60% in 2008). Meanwhile, 15% of participants plan to reduce headcount in the period from June 2009 to July 2010. The average planned staff reduction is 10% — the same level as indicated in the previous year.
Regardless of the economic downturn, the structure of employees’ benefits packages has not changed significantly. As in previous years, the standard benefits offered by the majority of employers include medical insurance, reimbursement of mobile phone expenses, corporate cars to certain groups of employees and sponsored meals.
In summary, it seems safe to say that the most pessimistic concerns about the Russian labor market in the economic downturn have failed, so far, to materialize. Many employers in Russia are using the current situation as an opportunity to optimize costs, including HR-related costs, and make their business more efficient. The past disproportionate lack of highly qualified professionals on the Russian labor market and applicants’ salary expectations have been reconciled. The competition for jobs among job applicants, as well as among job holders for the existing work places and for career progression, has become more intense. Further changes in the Russian labor market will depend on the situation in the Russian and world economy over the next few years.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax and legal, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.
Our Human Capital department in Moscow brings together over 70 professionals to help organizations in different aspects of work with personnel. Our services include establishment of HR strategy, designing effective compensation and motivation systems, assistance with the expat arrangement (legal support, labor and immigration law issues), and payroll services. The compensation and benefits survey is conducted annually.
Ernst & Young expands its services and resources in accordance with clients’ needs throughout the CIS. 3,700 professionals work at 16 offices throughout the CIS in Moscow, St. Petersburg, Novosibirsk, Ekaterinburg, Togliatti, Yuzhno-Sakhalinsk, Almaty, Astana, Atyrau, Baku, Kyiv, Donetsk, Tashkent, Tbilisi, Yerevan and Minsk.
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