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Employers respond to currency exchange rate changes
The majority of companies denominating salaries in USD has already changed salary arrangements or plans to do it in the nearest future
KYIV, 13 June 2008 – Ernst & Young, an international audit and advisory services firm, presents the results of an ad hoc Survey of Currency Exchange Rate Changes Impact on Salary Arrangements in Ukraine. The survey was carried out by Ernst & Young’s Human Capital specialists who annually conduct a number of different Compensation & Benefits Surveys in Ukraine.
According to the results of the Survey, 26% companies-participants denominate salaries in the US dollars, while 64% – in Ukrainian hryvnia, and the remaining 10% – in Euro. Overall 47 big companies working in Ukraine, predominantly – international, participated in the Survey.
Among companies denominating salary in the US dollars, 66% respondents have already changed salary arrangements; 17% – plan to do it in the nearest future; and 17% – do not plan to change salary arrangements.
To compensate salary losses due to the change of currency exchange rate, 55% of companies that changed salary arrangements, decided to use an internal or fixed exchange rate; 27% - changed the currency of salary denomination; and 10% – took a decision to make salary adjustments (i.e., increase salaries by certain %).
"According to our Survey, slightly more than a quarter of companies-participants denominates salaries or conduct internal planning in the US dollars; and these companies responded quickly to the change of the USD exchange rate in Ukraine. Moreover, 38% of companies that have already changed salary arrangements, plan to implement further changes. For example, some companies used fixed USD exchange rate for compensating salary losses by now but plan to change a currency of salary denomination in the nearest future. The labor market in Ukraine is very dynamic, and the majority of employers try to compensate salary losses to their employees. Apparently, these changes will have an impact on annual salary increases in compensation and benefits in Ukraine that we monitor closely," comments Olga Gorbanovskaya, Senior Manager, Human Capital Leader with Ernst & Young Ukraine.
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