The average wage increase in the private sector could reach 3.8 pc in 2017, PwC study shows

Wages in the private sector have increased by 3.7 percent on average in 2016, a slightly lower increase than that initially planned by companies (3.9 percent), this year’s edition of the salary and benefits PayWell Romania study made by PwC reveals.

The highest average salary increases were registered in the retail (4.3 percent) and FMCG (5.8 percent) sectors, while below average increases were registered in the banking industry (2.6 percent).

“This year, sectors directly related to consumption (retail and FMCG) reported the highest wage increases, influenced by the raise of the minimum salary at national level, but also by the positive economic results and increased consumption due to reduced VAT. However, sectors less related to internal consumption, such as banking, have maintained a cautious wage policy, similar to previous years,” Mihaela Mitroi, Tax and Legal Services Leader, PwC Romania and SEE stated.

For 2017, companies are cautious regarding budgeted salary increases, planning a wage increase level similar with 2016 (3.8 percent average increase at market level), with a stronger dynamic in the retail (4.9 percent) and industrial sector (4.4 percent) and a more moderate increase in the banking sector (3 percent).

The highest entry-level wages for employees with higher education are offered by pharma companies (RON 3,700 gross), while banks remunerate entry-level employees with less that half that amount (RON 1,800 RON). Entry level wages for employees with secondary education range between RON 1,400 and RON 1,600, depending on the sector. 29 percent of the respondents award wage increases to entry-level employees after the trial period is over.

Regarding performance based bonuses, these are awarded mostly at top and middle management level, but also to sales employees, such as for the sales staff in the FMCG companies (two thirds of the respondents offer performance based bonuses to this personnel category). Performance bonuses range between 9 percent of the annual wage for blue-collar employees and 40 percent of the annual pay for top management employees. For sales employees, performance bonuses equal a third of the annual wage.

The criteria for awarding the performance bonus is tightly related to individual results of the sales employees (70 percent of companies) and for the operational personnel (63 percent), although they depend to a greater extent to the company’s overall results for middle and top management (more than a quarter of the respondents take into consideration this indicator exclusively when deciding to grant performance bonuses).

As for the extra-salary benefits, PayWell shows that the most frequent benefits offered by local companies are, as usual, ‘security related”: such as meal tickets (74 percent) and subscriptions to private healthcare clinics (55 percent).

23 percent of the companies taking part in the 2016 PayWell Romania offer the possibility of a flexible schedule (a growing trend compared to previous years), 13 percent allow their employees to work from home, and 8 percent have short Fridays – also on the rise compared to previous years.