OREANDA-NEWS. On 18 March 2009 Ernst & Young, a global leader in assurance and advisory services, issued its final report on changes in compensation and benefits as of February 2009. Ernst & Young’s Performance and Reward group collected detailed information on new trends in HR policies and practices in the global financial downturn, as well as remuneration data on 109 key cross-industry jobs as of February 2009.

100 companies from different industries operating in Russia participated in the survey. The majority of survey participants are companies with foreign capital, with FMCG companies accounting for over 40%. This sample has strongly influenced the survey results. The same compensation and benefits survey was conducted among oil and gas companies, and its results are significantly different. The main reason is that the global financial crisis has less affected FMCG sector in Russia yet.

Based on the survey results, 91% of survey participants denominate salaries in Russian rubles, up from the previous year’s survey. In spite of the significant fall of the Russian ruble’s exchange rate, none of the participants plan to switch to a foreign currency.

According to the survey results, more than half of the participants have already decided to review the base salary in 2009, while approximately 40% of companies have not made a decision yet or are not going to change base salary in 2009.

In addition, approximately 30% of participants plan to increase base salary, while only 5% plan to decrease it. Largely, employers/respondents plan to increase salary for middle management, professional/clerical staff and manual workers and to decrease base salary for top and senior management.

Based on the survey results, the structure of the compensation package has undergone significant changes. ”Over the last few years there has been a trend toward increasing the variable component in the total compensation package. Now the opposite trend has emerged,” said Ekaterina Ukhova, Senior Manager in Ernst & Young’s Human Capital department. Moreover, due to the crisis, the majority of companies have not made variable payments for the 2008 fiscal year, and about 30% of survey participants are planning to revise the bonus policy and the criteria of bonus calculation in 2009.

An interesting trend is observed in the average size of bonuses paid for the 2008 financial year for certain personnel categories. The size of top and middle management bonuses decreased in 2008 from 2007, while the size of variable pay of professional/clerical staff remained at the same level. This is due to the dependence of top and middle management bonuses on financial results of the company.

”The new economic environment is forcing employers to revise development plans and implement programs aimed at optimization of business processes and cost cutting, including personnel related costs,” said Zhanna Dobritskaya, Partner in Ernst & Young’s Human Capital Department. “More than half of surveyed participants are planning to cut personnel related costs in 2009.”

Personnel related cost reductions will mainly affect the training budget: more than half of survey participants are planning to cut the training budget in 2009; meanwhile, many participants already cut their training budget in 2008. Cost cutting measures will be applied in revising business travel policy (more than half of the participants) as well as promotion policy (more than 20%).

Headcount optimization is one of the most relevant questions in personnel related cost cutting.

Many companies are planning to cut costs by optimizing employees’ benefits packages. Employers are planning to revise the policy for the provision of standard benefits such as medical insurance, reimbursement cost of mobile services, and corporate cars for certain categories of personnel.