OREANDA-NEWS. October 07, 2011. PwC Russia is pleased to present the results of its fifth annual HR Benchmarking Survey, reported the press-centre of PwC.

The survey pulls together data on more than 100 quantitative indicators calculated on the basis of 2010 financial year results. It lets users monitor the dynamics of key HR indicators and data points in comparison with prior years, as well as with data from surveys conducted across Eastern and Western Europe.

The survey results reflect an improving economic picture: most indicators have improved noticeably in year-over-year comparisons, while still falling short of pre-crisis levels.

The prevailing HR trend in 2010 was the balancing act many companies faced in simultaneously maintaining the right staffing levels to support business growth while avoiding any major increase in personnel investments, resulting in rising returns on investment in human capital (HC ROI). According to the survey, for each dollar invested in personnel compensation, companies earned back USD 2.10 (versus only USD 1.50 in the prior year).

The data point on shareholder value created (after-tax earnings less deductions representing shareholders’ investment risk) per employee has not yet reached its pre-crisis level (USD 17,378), although it has hit positive territory and shown significant growth versus the previous period, going from USD -492 up to USD 5,912. So, we can say that Russian companies have increased their appeal for current and potential investors.

Overall costs per one employee are growing slower than revenues and are still below their pre-crisis level. Company revenues per employee grew 30% year over year, while costs rose only 11%.

We’ve also seen changes in the proportion of various elements in the overall compensation mix. The share of variable payments grew 26% year over year to account for 22.7% of total cash compensation, versus 18% in the previous period. While the share of additional benefits rose to 3.6%, to date this figure has remained two times below its European counterpart, which is currently at 7%. The trend and distribution of various elements within the overall compensation mix differ significantly by sector. For example, the share of additional benefits in the overall cash compensation amount was 2.6% in the telecoms sector, but 8.0% in the FMCG sector.

Investments in personnel training and development continue to be cut. According to the Russian survey, the proportion of training and development investments in the overall cash compensation amount was less than one percent, or fully 37% lower than the European survey figure. The scope of corporate employee training programmes shrunk only slightly, while the workload of training and development staff has increased dramatically (the number of overall company staff per each corporate training department employee has grown 32%).

In the 2010 financial year, Russian companies hired more staff than they let go. According to the Russian survey, of the overall number of personnel 17.3% were hired for newly created positions while 16.6% were laid off. In Europe, we saw a continuation of the opposite trend: the percentage of layoffs exceeded the percentage of new hires.

Recent macroeconomic fluctuations have had a serious effect on the role of corporate HR functions within a company as a whole. The priorities of corporate HR functions have shifted from cutting personnel costs to a focus on talent recruitment and retention. According to the prior year’s survey, labour productivity and optimising personnel costs were singled out by respondents as the most important areas. In 2011, however, the top priorities are such areas as corporate culture change, employee satisfaction initiatives, and recruitment.

Survey overview
The HR Benchmarking Survey 2011 analyses how HR management systems can have an impact on business success, and identifies those aspects of HR management most in need of further improvement.

Survey data make it easier to for a company to assess HR management KPIs in financial terms as well as understand what resources they must use to achieve specific productivity gains.

Those data points contained in the survey reflect the primary areas and processes of HR management, including:

employee impact on a company’s financial results

compensation and benefits

behaviours

recruitment

training and development

organisational structure of corporate HR functions

Participating in the latest survey were 69 companies from diverse sectors, which submitted data for the period 1 January through 31 December 2010. The majority of participants represent such sectors of the economy as manufacturing (34%), FMCG (19%), energy and extractive industries (16%), finance (14%), telecoms and hi-tech (9%), and retail and pharmaceuticals (8%). Forty-two percent of participants have more than 2,500 employees, and 40% reported revenues upwards of USD 1 billion.