The pandemic did not stop the rise in wages: up to 70 percent. Population Earned More, Business Survey Shows

Despite the challenges of the pandemic, the monthly basic salary in Lithuania increased by 70% this year. According to the Baltic Labor Market Survey conducted by the research company Baltic Salary Survey. It is true that growth was almost half that of last year and did not reach the 5 percent threshold predicted by experts.

“The growth of the real basic salary this year is around 4.4 percent, and the annual salary with bonuses, 3.9 percent. Therefore, the growth of these salaries is 3 and 6 percentage points slower this year than in 2019, respectively, ”said Povilas Blusius, a consultant for the Baltic Salary Survey company, which conducted the survey.

This is in stark contrast to economists’ predictions in the spring that wages in 2020 should fall.

“As much as we like to dramatize the situation and despite the bad forecasts that wages will fall, it has become clear that the market is resilient, it has an accumulated pillow of previous growth and if we show the change in the British or the French, they would be 2-3% “. – P.Blusius commented.

As much as we like to dramatize the situation and despite the bad forecasts that wages will fall, it turned out that the market is resilient, it has an accumulated pillow of previous growth – said P.Blusius.

And for that 70 percent. of employees whose salaries increased increased by as much as 8.4 percent, with bonuses, as much as 11.5 percent.

The information technology, sales and financial sectors maintained the best indicators of salary growth, reaching around 5%.

In other Baltic countries, the situation is similar: in Latvia the basic monthly wage increased by 4.2 percent, in Estonia – by 6.3 percent.

By the way, according to the calculations of the Baltic Wage Survey, the living wage for a family with a child is 1908 euros in Vilnius.

According to the Baltic Wage Survey, the living wage for a family with one child is 1908 euros in Vilnius.

Wages fell in the service sector

According to the study, 70 percent. employee salaries grew 28 percent. – did not change, but fell only 2%. workers. It is true that during the quarantine it was reduced by 10 percent. companies, but this was a temporary reduction.

By the way, last year wages fell just 0.2 percent. employees.

“The market has been affected differently: the majority of employees felt the increase in compensation, a significant part did not feel any change, which is also good, and 2%. “Even 10 times more than last year, he felt a decline or decline,” concluded the analyst.

The service sector was the worst performer, with wages falling 3.2 percent on average.

“There are hotels, catering establishments and other service companies in the service sector. For companies engaged in these types of activities, the quarantine introduced at the beginning of the year was a difficult challenge. Therefore, the drop in wages is understandable here: employers simply sought to survive the pandemic that deprived them of their main source of income, ”said P. Blusius.

18 percent full annual salary with bonuses decreased.

“This change was due to the fact that the companies of the pandemic did not pay bonuses or added value. The reduction of the base salary is always used only in the extra case, since it is a much stronger emotional blow for the employees, since the income considered stable is decreasing, ”says P. Blusius.

The analyst revealed that the survey revealed at least ten companies whose managers have reduced their salaries to the minimum wage. It is true that these were mostly the owners of the company who acted as managers.

Staff turnover has decreased and layoffs have increased

This year, volunteer staff turnover has been reduced by 2 percent. and currently stands at 14.2 percent. And here the number of layoffs increased by 0.4 percent. and now it’s 5 percent.

True, analysts highlight the quarantine period during which companies were forced to lay off 17 percent. employees – another 17 percent. increased the number of employees, but 59 percent. did not reduce the number of employees. Or 7 percent. I took the opportunity to optimize the number of employees.

“When wages increase, employee turnover also increases, because the employee sees that wages in the market are growing faster, so it is natural that when he sees a job advertisement, he travels somewhere. During the quarantine the workplace was valued more. Instead, voluntary change was reduced by 16 percent. up to 14% ”, said the analyst.

According to the study, 17 percent. the organizations laid off part of their staff, 7 percent. I took the opportunity to optimize the number of employees.

“17 percent. Reduced the number of employees in companies by an average of 22 percent and 35 percent. All or part of the employees were declared inactive. While this confirms the trend that during the quarantine companies tried to optimize their teams and save costs to survive, the majority (even 59%) of the companies did not reduce the number of employees in the least, ”says P. Blusius.

To reduce staff shortages, companies continue to allocate resources to training and retraining as usual, reallocating responsibilities.

“Improving leadership skills remains a major challenge in HR. This challenge has dominated survey results for many years, regardless of industry. Therefore, we can safely say that we have had a leadership deficit. very large in the labor market for many years. It becomes even more pronounced in the face of a pandemic, “says P. Blusius.

Free snacks have been replaced by coronavirus testing

31 percent of companies rejected additional benefits during the quarantine: snacks in the workplace, events. Some companies have waived all the frills like health, travel insurance, loyalty supplements, sports and health supplements.

“Perks like snacks or team celebrations moved into employee homes before the summer. There continues to be a growing concern for the psychological well-being of workers and protective measures. After the quarantine has slowed down, most companies have decided to go back to their offices and organize the previously planned vacations, but as the number of illnesses increases, they plan to go back to teleworking and forgo the supplements, “says P .Blusius.

10 percent of companies expanded the range of additional benefits and offered employees psychological help, free coronavirus tests, COVID-19 insurance. It also provided training for the whole family and increased telecommuting opportunities.

The most popular additional benefits this year remain the same: coverage of mobile devices and communications accounts, entertainment events, professional events, courses and seminars.

“Due to the circumstances caused by the pandemic, the popularity of some additional benefits has changed. Company cars are provided 6% less frequently, 5% less. Less frequent events and trips organized by employers. Naturally, the possibilities remote work (23%) and flexible hours (12%) grew, ”said P.Blusius.

Next year, most employers will raise wages

Although wages grew less and were cut more frequently, Lithuanians are optimistic about the future. Up to 91% plan to increase the compensation of their employees next year. employers in Lithuania.

“In our country, future forecasts are much more optimistic than in Latvia or Estonia, despite the fact that the level of concern about the COVID-19 situation is higher. In Lithuania, in August, the company estimated the level of concern at 3.4 points out of 5, while in Latvia it was only 2.8 points. But in Lithuania next year he still plans to increase the basic salary by 91 percent. companies, while in Estonia – 86 percent, in Latvia – only 75 percent ”, says P.Blusius.

It is expected that next year the variation of the basic salary will be even lower than this year and will reach 4.1 percent.

During the Baltic Salary Survey conducted in April this year, 1,000 organizations from the Baltic States and almost 35,000 people were surveyed. employees in Lithuania.

The public sector grew more

The Bank of Lithuania noted that there were signs of recovery in wage growth. Before the pandemic, wage growth averaged 9-10%, falling to 3-5% in March-May, but, as Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, emphasized, the latest data for June-July suggest that growth is beginning to pick up.

It is true that V. Vasiliauskas pointed out that the wage growth trends of the public and private sectors differed especially: in the public sector, wages grew faster.

Blusius commented that the faster increase in public sector salaries could have been driven by political decisions, such as an increase in medical salaries.