OREANDA-NEWS. October 12, 2012. PwC has presented the results of its annual survey "General Industry Salary Overview:  2012," which examines policies, practices and salary levels in companies doing business in the Russian Federation.  This year, 79 companies participated in the survey, 18 of which also took part in it last year, reported the press-centre of PwC.

The comparative analysis performed on the change in salary levels for different job categories revealed that the average increase in salaries in 2012 was 11.0%.  Salaries increased the most among managers at the senior level (13.2%) and increased the least among rank-and-file/general support personnel (10.3%).

This analysis of salary changes attests to the fact that the maximum salary increases occurred among employees with general management and regulatory support job functions (15.1 - 15.8%). Meanwhile, the smallest salary increases were amongst those in construction (2.3 - 4.5%).

As far as the particular elements of compensation are concerned (fixed and variable components), the smallest fixed salary amounts (49.9%) are at the first level of upper management (general director). Base pay for second (board member) and third (director) levels of top management amounts to 58.1% and 73.4%, respectively. It should be noted that the lower the job level, the larger the fixed portion of the worker's total compensation will be.

Nikolai Romanov, manager, HR Consulting Services, PwC:

"It is possible that the increase in salaries for top management is compensating for a lack of increases in bonuses for 2011 and previous years.For example, in some companies, annual bonuses were not paid out during the crisis and post-crisis years because business plans were not met."

Analysing figures for base pay in Moscow and St Petersburg, one can say that the gap in the level of base pay between these cities has narrowed in 2012 compared to 2011, and is currently at 20 percentage points (versus 28 last year). It should be noted that the relationship between base pay in Moscow and St Petersburg significantly differs depending on the sector of the economy. The IT and telecommunications sector in St Petersburg has to a large extent caught up to Moscow's salary levels for such employees (82.6% of the Moscow level).  Meanwhile, in the insurance sector, specialists in St Petersburg earn only 74.8% of what their Moscow counterparts do.

Vera Bogatykh, senior manager, HR Consulting Services, PwC:

"In our opinion, the discrepancies between base pay levels in Moscow and in the Russian regions will naturally decline. This is because more large companies are coming to the regions and are opening high-tech production facilities, are working on development and opening research centres. Local businesses are also developing, thereby increasing the need for qualified specialists. Recently in the regions, we have been seeing serious competition among employers for talent at a level quite comparable to Moscow.  All of this is leading to a boost in the size of average salaries outside of the capital.”

Other takeaways from the survey:

The majority of companies (90%) use bonuses based on performance as a financial incentive tool, to a greater degree for middle management (97%) and upper management (90%).

Twenty-two per cent of companies employ long-term incentive payment programmes.  Among these companies, upper management participates in 67% of such programmes and middle management, in 47%.  The most popular of these types of programmes are phantom stock options and performance unit plans. 

The average monthly salary for recent graduates without professional work experience is RUB 30,000 and RUB 25,000 for students in their last year of studies (interns).

Sixty-six per cent of respondents employ a system for evaluating employee performance. The most popular evaluation method is an assessment interview. The results of the performance assessment affect the payout of bonuses, including annual bonuses (84% of companies), the employee's advancement and expansion of duties (75%), as well as any raises to their base pay (75% of respondents).

The most common benefits granted to all categories of staff are medical insurance and a company mobile phone.

Sixty-five per cent of respondent companies employing a flexible schedule policy offer a shortened work day on Fridays.

Seventy-six per cent of respondents offer company cars to upper management, while 30% also offer this benefit to middle management.

More than half of respondents (67%) use outsourcing. Eighty-nine per cent of companies outsource certain functions and 49% outsource individual processes.