Some 90% of employers in Latvia are planning to increase their workers’ pay in 2015. Managers’ pay is expected to rise, too, but the increases are greater in certain sectors and regions.
Two studies on pay trends were included in a survey carried out by management consultants Fontes Vadības konsultācijas, published in January 2015. One looked at the pay trends of 238 managers in 110 independent organisations (or groups of organisations). The other examined general pay trends based on data from 249 independent organisations employing a total of more than 43,000 people.
According to newspaper Dienas Bizness, the first survey shows that 80% of Latvian organisations plan to increase the basic monthly salary of directors and board members, while 20% do not intend to. The forecast increase for managers and board members is an average of 3.7% in 2015 and 3.5% in 2016 (in Latvian). Of those not planning an increase, 18.5% plan no change in pay for their managers, and 1.9% plan to cut their pay.
The second survey shows that 90% of employers plan to increase salaries in 2015. Of the remainder, 9% do not expect to make any change in wages and 1% plan pay cuts. The annual growth of pay in general is forecast to be 4% in 2015 and 3.8% in 2016.
The surveys also report that pay has not increased evenly. In 2014, for example, although basic monthly salaries increased by an average of 4.7%, some 64.6% of workers had no increase. Wages fell for 0.1% of workers, and increased by 8.4% for the remaining 35.3% of workers. Total pay (including bonuses) has increased by 5.8% on average. It increased by 9.1% for 60.7% of workers, and fell by an average 6.3% for 30.8% of workers.
Business experts said regional differences were the cause of the unevenness of pay. The head of human resources company IG Consultation, Iluta Gaile, was quoted by Dienas Bizness as saying that wages in the capital Riga could differ significantly from those in remote regions despite the jobs being in the same sector. These differences lead to workers migrating to Riga and to rural areas becoming depopulated. Wage trends are also affected by demand; the high demand for workers in IT, finance and construction have led to higher wage increases. Experts believe that in these sectors wages could increase by up to 10% in 2015. High increases are also expected in telecommunications and high-tech companies.
Data from the Central Statistical Bureau (CSP) show that in March 2015 average wages had increased by 7.7% compared with March 2014, and had increased by 4.4% in the three months since January 2015. In the private sector, wages grew by 8.9% compared with March 2014 and by 4.8% compared with January 2015. However, wages in the private sector in March 2015 were 1.4% lower than the national average, and 14% lower than wages in government ministries and state institutions.
These positive trends in wage growth are supported by overall optimism on the future development of Latvia. General indicators in the DNB Latvian barometer (in Latvian), a regular monthly survey by DNB Bank, have been improving since 2009. It is characteristic of the barometer, however, that its assessments of future developments are always better than its assessment of the current situation.