The gross wages in Romania’s private sector increased by an average of 9.4% in 2019, over estimates

Autor: Financial Market
3 min

The gross wages in private companies increased by an average of 9.4% in 2019, according to PayWell Salary and Benefits Survey conducted by PwC Romania. The salary increase reported for 2019 exceeds the level of 4.6% estimated for this year by the respondent companies in the previous edition.

For 2020, private companies are estimating a 5.7% average gross wage increase. The highest average wage growth in 2019, of 14%, was recorded for the hotel sector. Also, increases over the average of all sectors included in the survey were reported by industry + 11%, leasing +10% and retail +10%.

According to Paywell 2019, the average gross salary among respondent companies rose to RON 5,941 from RON 5,428 in 2018. In terms of staff categories, continues the tendency to increase at a faster rate of wages
among unskilled or low-skilled personnel (workers, operators), on average 10%.[emaillocker]

Compared to the previous years, however, when salaries at the managerial levels stagnated, in 2019 the operational management positions increased by 13% and the top management positions by 9%.

At the opposite, with 5%, there are administrative staff, technicians and employees with little experience.

We note that the wage increase in 2019 was higher than the level predicted by the companies included in Paywell last year, being influenced mainly by the workforce shortage, but also by the evolution in the public sector and by the government decisions regarding the minimum wage.

As a result of the cumulative increases of about 50% that have been taken place in the public sector since 2017, the ratio between PayWell average income, representing mostly medium & large companies, and national average income has dropped from 1.4 to 1,16 during this period. In this context, private companies face a double pressure: on the part of the public sector, which has become much more attractive for the employees and the workforce shortage that has intensified in recent years”, said Daniel Anghel, Leader of the Tax and Legal Department, PwC Romania.

In terms of benefits, meal tickets, annual leave days and special occasion bonus continue to be top. However, compared to previous years, the biggest increases in popularity were recorded by time management (flex time, work from home) and benefits related to the wellbeing of employees (bookstore, health programs, etc.).

Employees have started to appreciate other benefits besides the traditional ones. For example, transportation benefits, flex time or work from home are more required. As the labor market is becoming more competitive, employers are increasingly concerned about developing various benefits packages and an attractive work environment, to be preferred by employees or to retain them. The increased attention paid to the differentiation benefit programs is a sign of the labor market sophistication as the standard of living increases.

This trend will continue in the coming years, with potential for acceleration if the fiscal legislation will further encourage the promotion of certain benefits, which may also have a positive social impact (health insurance, pension plans, etc.)”, said Oana Munteanu, Senior Manager PwC Romania.

Other conclusions of the study
Top average gross salaries in 2019 by function were in Strategy – RON 12.220,
followed by Legal – RON 11.026 and IT – RON 10.769.
Bucharest continues to lead the earnings top, with average salary almost double as
compared to Muntenia.
• At county level, the top five Paywell are Bucharest-Ilfov, Timis, Cluj, Brasov and Iasi.
The largest wage increases in 2020 are estimated for retail, of 7.42%, the pharmaceutical sector, 6.3%, and banking, 4.73%.

About PayWell 2019
PwC conducted the survey on 100 private companies from Banking, Leasing, Pharmaceuticals, Industrial products, Retail and Hotels sectors. Participation in the survey implies provision of information on salary levels and compensation and benefits policies currently in place within the surveyed organizations.[/emaillocker]