PwC: Salary costs weigh heavier on Romania than on other CEE countries

Salaries account for a mere 12.5 percent of total costs for Hungarian companies, 11 percent for Polish enterprises, and 11.7 percent for Bulgarian firms. Only Czech companies feel pressure similar to their Romanian counterparts, with a 17.2 percent ratio of total costs.

Data was provided by the “European Human Capital Effectiveness Report,” compiled by the PwC’s Saratoga Institute which specializes in benchmarking studies.

“Considering that the increase in company revenues will not be as high as that registered in past years, firms will have to maintain their profit by cutting costs, and they will soon target their workforce costs,” said Ruxandra Stoian, Manager of PwC Romania’s Human Resource Department.

Stoian added that significant salary rises in the past years have caused local companies to make do with higher fixed costs than other companies operating in the CEE region. Fields with the highest salary ratio in terms of total costs include the banking sector (50.5 percent), the IT sector (45.9 percent), and the insurance segment (39.9 percent).

According to Ruxandra Stoian, Romania will not have to resort to major layoffs on the local market, even in the industries most affected by the global crisis. “Some companies could adopt a common Western practice, the so-called “salary sacrifice”, based on which employees accept a temporary drop in salaries to keep their jobs,” she added.