2018-04-04
The latest survey of enterprises shows that half of them intend raising wages for their employees this year. Moreover, most of enterprise managers and financiers believe that wages will be raised fast at least for a couple of years.
‘The survey revealed that the number of enterprises that promise to raise wages is the largest over two years. With a lack of employees, businesses are obliged to increasingly fight for them and improve employment conditions. As the economy has been growing, a substantial share of enterprises does have possibilities for that; and yet businesses, in order to further remain competitive, should increasingly focus on how to increase labour productivity,’ said Andrius Škarnulis, Head of the Macroprudential Analysis Division at the Bank of Lithuania.
According to the Survey, 49.9% of enterprises intend raising wages over the next six months, while during the last year’s survey this figure was 37.3%. Within the services, trade and industrial sectors, the share of enterprises that intend to raise wages over the next six months was quite similar (about 52%), while that of construction enterprises was smaller (about 42%).
According to Mr Škarnulis, the wage raising wave has also arrived to small and medium-sized undertakings. It is namely within these segments that businesses intending to raise wages have increased in number the most. Compared to the results of the previous survey, the share of medium-sized undertakings (10–50 employees) that intend to raise wages grew by more than a third (from 42% to 58.2%), while that of small-sized enterprises (up to 10 employees) surged by two-thirds (from 24.3% to 40.8%.
According to the latest survey, almost 60% of enterprises raised wages over recent six months. This number increased by 6 percentage points. The share of those who believe that the trends of strong wage growth will persist for more than two years expanded to about the same extent as well. Previously there were more of those who believed that the period of strong wage increases would be shorter.
According to Eurostat data, in Lithuania, Latvia and Estonia enterprise staff expenditure accounts for about one-fifth of enterprise costs. Meanwhile, in the old European Union countries, e.g. Sweden, Germany or France the staff expenditure share is larger and accounts for about a fourth of total expenditure.
Based on the latest Bank of Lithuania projections, this year average wage in the country will rise 6.7%, in 2019 – 6.0%.
The survey of non-financial undertakings operating in Lithuania was conducted by UAB Baltijos tyrimai on behalf of the Bank of Lithuania. The survey was conducted in February 2018; during it, responses were received from 509 enterprises operating in Lithuania (o/w 116 – industrial, 95 construction, 127 trade and 171 service enterprises). We will report in the near future on what enterprise expectations are, what resources they use for expansion, and reforms in which field are the most awaited by businesses in the Review of the Survey of Enterprises.