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Record-high number of firms announce pay raises

Published: 31.12.2015

The percentage of firms planning wage hikes in the coming six months is growing, a survey published by labor market services firm Randstad and TNS Polska pollster showed. At present this percentage stands at 35%, up from 25% a year ago, the survey showed. The survey was conducted at the turn of October and November and its results were published in December.

"As many as 35% of firms, a record-high percentage, want to increase wages of their employees in the coming six months," the report reads. "It is 10 pps more than a year before, and it is the highest level of wage hike declarations in the seven-year history of the survey."

The highest percentage of wage hike declarations, 40%, was recorded in the industrial sector as well as in the segments of logistics (38%), trade and repair (35%) and financial intermediary services (34%).

Employment growth will accompany wage hikes

As many as 68% of firms are positively assessing their financial condition, and as a result some of them are pointing to the need of increasing employment, the survey showed.

"31% of firms plan to create new workplaces at the turn of the year, a 2 pps decline q/q, but a 5 pps y/y increase and a 12 pps increase compared to 2013," the report also indicated.

Employment growth can be expected nationwide, regardless of the city or region where a given firm is located, Randstad research institute head Katarzyna Gurszynska explains.

"Additionally the employers notice that wage pressure is presents" she added.

Employers forecast wage increases for almost their entire workforce, but in most cases wage growth will be minimal: up to 6.99% of the current salary. Only 14% of firms intend to hike wages by more than 7%.

Wage increases continue to be awarded largely in a flexible manner: i.e. depending on individual accomplishments of the employee. However, some employers decide to increase salaries at certain periods during the year, for instance every quarter or at end-year, or at a time of increased wage pressure from employees.

 Over one third of firm representatives expect wage increases in the near future: 42% of representatives of biggest firms (employing at least 250 workers) have such plans. Over half of entrepreneurs declare that wages will stay put in their firms. Such expectations are most common among firms employing between 10 and 49 persons (60%). Only 1% of firms expect wage declines.

Source: Randstad

"It will be good to be an employee in the nearest future as over a third of the employers want to increase wages," FDI promotion agency PAIiIZ head Slawomir Majman commented on the results of the survey.

Majman points to the employers' optimism which characterizes the survey results.

"Let us remember that at the time the survey data were collected there were many question marks and uncertainties regarding the new economic policy and internal conditions," Majman said.

While firms assessed their own situation well, macroeconomic assessments of the economy were not as bright, he pointed out.

"The result of the survey indicates that firms actually have development plans, are in good shape and feel the need to recruit employees and reward their staff through wage increases," Randstad's head of legal department Agnieszka Bulik added.

KPMG report also optimistic

The KPMG consultancy's report "Pulse of Economy 2015" presents equally optimistic survey results, pointing to expectations of revenue and employment growth reported by medium-sized and large firms. Despite the fact that just 24% of firms expect an improvement of their financial situation in 2016, 40% of firms forecast employment growth and 45% forecast wage growth.

In the CEE region, on average some 51% of mid-sized and large firms expect their economic situation to improve in 2016, according to the KPMG survey, conducted among 731 firms in nine countries.

In Poland this percentage was the lowest: 24% of firms expect improvement and another 54% expect stabilization of their financial standing. Similar results were recorded in Estonia (29% improvement, 51% stabilization). These countries also had one of the largest percentage of firms expecting their financial situation to deteriorate in 2016: 21% in Estonia and 23% in Poland, behind just one country, Bosnia and Herzegovina (32%).

"Polish entrepreneurs have been operating in the environment of constant economic growth for over ten years, so it is not surprising that they are not as optimistic as firms in other countries of the region, which dealt with a real crisis," KPMG's head of advisory services for Poland and CEE Leszek Wronski commented.

Polish firms lead employment growth plans in the region

The highest percentage of firms planning employment growth in 2016 was recorded in Romania (42%), Poland (40%) and Hungary (39%), the KPMG report indicated. The lowest: in Lithuania and Latvia (21%). The two Baltic States also have the highest percentage of firms which plan headcount reductions (18% in Lithuania and 19% in Latvia). The vast majority of firms plan maintaining employment close to current levels. In Poland this percentage stands at 49%.

"Paradoxically, Polish firms conducted a radical employment restructuring in the years 2009-2010, fearing an economic crisis in the country," Wronski said. "Therefore firms which have an optimistic outlook are aware that their further development may require headcount increases. This is good news for young persons who in recent years found it hard to find a job."

Half of Polish firms expect wage growth

Three quarters of firms in the Czech Republic and Estonia plan wage increases for employees in 2016, the KPMG report showed. A similar result (69%) was recorded in Lithuania. Poland, with a score of 45%, was among the CEE countries with the smallest percentage of firms expecting wage growth, ahead of Latvia (39%), Hungary (39%) and Bosnia and Herzegovina (42%). The percentage of firms planning wage cuts was insignificant in the surveyed group.

According to Wronski, the stability of Poland's economic environment in recent years is a factor which encourages entrepreneurs to continue their current wage policy.

Source - Polish Press Agency, Economic Service 

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Published by: Piotr Krupa
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Last change: 31.12.2015
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