Workers who proved worth in crisis reap pay rewards.
Despite challenging economic times, companies are ending the trend of cutting or freezing salaries and are even starting to slowly increase pay and benefits.
Employment experts say the increases are more cautious and selective than in the boom years leading up to the 2008 crash, but employees who have shown they are key personnel over the crisis period are now being rewarded with pay rises.
Ukraine Compensation & Benefits Survey 2010, conducted annually by global Big Four auditing firm Ernst & Young, estimates companies increased wages by 12-13 percent on average.
The first to be rewarded were top-performing managers.
“The percentage was more or less the same for different industries, but increases were a bit higher for top and senior management,” said Olena Veselkova, senior consultant on human capital at Ernst & Young.
The survey notes a recovery in the labor market and growth in employees’ wages.
In 2010, companies have “stopped cutting personnel and about one third of the companies, that took part in our surveys, had begun to recruit personnel, especially middle management and professional staff,” the report reads.
In some cases there were even separate policies for key employees and top talents, and this sort of differentiation is increasing with each passing year. And key employees earn the highest pay.”
– Olena Veselkova, senior consultant on human capital at Ernst & Young.
After the painful lessons of the economic downturn, most of companies have put a stop to the rash salary growth that ran from 2005 to the first half of 2008.
Most companies plan to raise wages in the next year, but the increases will be smaller.
Companies also started to rethink their approach toward hiring and retaining top employees and are now linking rewards more directly to performance.
Special attention was paid to retaining key employees.
“In some cases there were even separate policies for key employees and top talents, and this sort of differentiation is increasing with each passing year,” said Veselkova. “And key employees earn the highest pay.”
Alex Yurchenko, country manager at Hudson, a global recruiting agency, said that some specialists in the same position at the same company could earn totally different amounts, depending on their performance.
Industry experts say that employers are also showing a more pragmatic approach towards salaries and benefit packages compared to earlier times.
If an employer wanted a certain professional, he might previously have simply offered to double his salary. This year such cases are extremely rare.”-Alex Yurchenko, country manager at Hudson.
“If an employer wanted a certain professional, he might previously have simply offered to double his salary. This year such cases are extremely rare,” said Yurchenko from Hudson.
The gap in pay between the highest positions and the lowest continued to increase, according to the survey.
Employment experts also note that bonuses now make up a larger proportion of total salaries.
“Potentially an employee could receive higher bonus than in previous years upon achieving certain targets. However, it is worth noting that targets have become really tough to achieve,” Yurchenko said.
Another salary study for 2010 conducted by Hay Group, a global management consulting firm, showed that the best paid jobs can be found in companies that produce fast moving consumer goods.
“The majority of such companies are international, they kept the compensations stable or even growing during the years of downturn,” says the report.
Kyiv as the capital traditionally gives opportunities for best paid jobs. According to the Hay Group study, salaries in Kyiv are 14 percent higher than average in Ukraine.
The highest levels of pay are offered in finance, sales, marketing, informational technologies and legal services. The lowest-paid jobs are in production, human resource management and administrative services.
Hay Group research also has some good news for employees: 78 percent of companies plan to increase wages in the first half of 2011.
Head Hunter, an employment website and consultancy, also surveyed well-paid positions on the basis of compensation levels that employers announce in their vacancy advertisements.
Top positions like general director are on average offered Hr 40,000 per month, financial director – Hr 25,000 and sales directors – Hr 18,000.
Public relations managers, lawyers, chief accountants, brand managers, IT project managers and developers are in a mid-range from Hr 7,000 to Hr 13,000.
The lowest pay for professionals is offered to accountants, human resource managers and designers, with an average of from Hr 3,000 to Hr 5,000.
Kyiv Post staff writer Olga Gnativ can be reached at [email protected].
