Never mind deflation and recession, 2012 was a good year for professionals working in Ukraine. A new report by global auditor Ernst & Young shows that competition for talent led to double-digit salary growth in many industries. Moreover, the trend is set to continue in 2013, albeit it at more leisurely pace.
Its not every day you hear good
economic news out of Ukraine. Last year in particular was rife in
doom and gloom – the economy started shrinking in the third
quarter, industrial production fell even faster, and the country’s
foreign reserves took a 23 percent hit. With no inflation to speak
of, one could hardly expect rising incomes, right?
Wrong. Though many will no doubt claim
the opposite, average monthly salaries rose from $331 in 2011 to $379
in 2012, according to estimates by Kyiv-based investment bank Dragon
Capital. That’s an incredible 14.5 percent, or 12.8 percent in real
terms, after factoring in the minor price changes.
The report by Ernst & Young’s Human Capital research group shows a similar trend. Based on sector
surveys, the study found that between July 2011 and June 2012, 84
percent of companies polled increased wages by a median value of 10
percent.
TV saw the highest growth with the
median salary rising 13 percent, followed by consumer goods, which
saw an 11 percent rise. Banks and retail grew the slowest, with wages
increasing 6 and 8 percent, respectively.
Regarding absolute numbers, the average
yearly salary was $22,063 compared to $18,815 in 2011. Interestingly,
salaries grew across the board except for the top 10 percent of
earners, who saw their earnings drop from $41,747 to $34,330.
TV employees saw the highest median
salary, with $32,275 (compared to an overall annual median value of
$16,860), with the pharmaceutical industry coming in second at
$25,211. Fast moving consumer goods, were lowest at $12,201, behind
the median $14,031 in the banking sector.
But salaries alone are not enough to
paint a full picture, as perks are increasingly becoming part of the
standard package for Ukrainian workers. Of those companies surveyed
in the Ernst & Young report, 93 percent offered their employees
mobile phones, 85 percent provided corporate cars and 81 percent
provided medical insurance (representing increases of 7, 4 and 5
percent, respectively).
Equally interesting are the changes
taking place beneath the service. Whereas in previous years human
resource services just looked at salaries, the focus now is on
training and corporate culture. As the jobs become more sophisticated
so are the skills required, meaning that firms invest more resources
into training each worker.
At a Jan. 18 conference devoted to the
topic, the HR directors from such companies as retailer Metro Cash &
Carry and steel-producer Interpipe all highlighted the emphasis on
recruiting young workers proficient in English and other languages,
and able to more rapidly adapt to the requirements of the modern
workplace.
Firms are also looking to implement new
motivational systems, like the growing use of performance-based pay.
Tetyana Strekal, HR director at Alfa Bank, said the company was
successfully experimenting with an Anglo-Saxon format of weekly
payments. To further boost morale, she added, the bank introduced
flexible schedules and the ability to work from home.
“We offered preferential credits,
but it seems people prefer to work in slippers,” she joked.
Looking ahead, 2013 is likely to follow
in the same trajectory, with planned salary growth of 10 percent on
average, albeit concentrated in fewer companies than last year.
Headcounts should also increase, with 30
percent of companies planning to boost the number of their staff and
just 8 percent contemplating reductions. The numbers vary
significantly by sector, though, with 24 percent of banks
anticipating job cuts and no increases, while broadcast media is set
to move in the opposite direction – 60 percent of respondents
expected to increase their headcounts and none anticipating cuts.
Pharma is also eyeing strong growth,
with 53 percent of respondents planning to increase staff numbers.
Overall, the biggest growth is set to come from professional and
clerical workers, while the number of managers will likely be stable.
The question is how sustainable this
situation is. At around 0 percent gross domestic product growth for
2012, Ukraine is one of the weakest economies in the Central and East
European region. The European Bank of Reconstruction and Development
has just revised its growth expectations for 2013 to 1 percent. With
such fundamental parts of the economy like metallurgy in the doldrums
and a terrible investment climate, it’s hard to see where growth will
come from to sustain those rising salaries.
Kyiv Post editor Jakub Parusinski
can be reached at [email protected]
