The average monthly wage growth – for an employee working in the same post for a long time – in Latvia has reached +11.5% when compared to the same period a year prior, according to the annual General Remuneration Survey conducted by the remuneration research and management consulting company Figure Baltic Advisory (FBA).
The growth of the total wage amount, including the variable components, was +14.3%. This is the most rapid average wage growth since the pre-crisis period of 2008, which was the other time when a double-digit wage growth was observed. As part of the survey, the average amount spent by various organisations to provide their employees with additional benefits (healthcare, events, benefits, etc.) was also calculated.
“Although one of the factors behind wage growth last year and the start of this year was the growth of inflation and minimal wage growth for people employed in lower positions, it is not the only aspect that promotes wage changes. Wage growth remains
largely affected by the shortage of labour force
in Latvia in general and the shortage of qualified specialists in various sectors.
With economic growth restarted and demand for workers up, labour force availability becomes the most notable factor affecting wages. In turn, the faster growth of the total remuneration was also determined by the fact that many organizations achieved good performance in 2022 and at the beginning of 2023, thus paying more generous bonuses,” explains FBA senior consultant Dace Tauriņa.
She explains: “Wage growth was more rapid in regions in an effort to catch up to Riga. However, when it comes to future forecasts it, it should be stressed that they will largely depend on the change of economic growth rate in Latvia and the region in general, as well as ongoing global processes. We do expect, however, the wage growth rate to go down.”
The survey also determined the most popular additional benefits organisers offer their employees – the most common is the ability to work remotely, which is offered by 96% of organisations that participated in the survey. This benefit is followed by shared events, such as sports activities (95%), health insurance (93%), mobile phone for work and personal use (90%), Christmas, birthday and other gifts (80%), benefits associated with various important life events (wedding, childbirth, and others) 80%, as well as flexible work time (79%).
“When it comes to benefits to offer to employees, it is important to keep in mind that they not only increase organisations’ ability to attract and retain workers, but also provide the opportunity demonstrate to workers that they and the work they do are appreciated. At the same time, it should be said that the current trend is individualising benefits, adapting them to workers’ needs and the specifics of their respective jobs. Although it creates additional administrative burden, it does help avoid situations when employees are offered benefits that they never use.
We have calculated the average amount used every year to provide benefits to an individual employee – EUR 996
(EUR 887 for labourers, EUR 1 016 for specialists, EUR 1 084 for drivers),” says FBA senior consultant Kristiāna Boša. Survey results show that 90% of organisations offer short-term (variable) bonuses for at least one group of employees in the organisation, 47% offer sales bonuses and 14% offer short-term bonuses.
The survey also analysed changes in the numbers of employees – more than half (60%) have hired on more people in the past 12 months, 27% have laid off employees, and 13% have not made changes. The average turnover of employees who have left voluntarily was 14%. The general employee turnover was an average of 20%. Data indicates that 61% of organisations have plans to hire on more workers by the end of the year, 28% have no such plans, and 11% have plans to lay off employees.
The General Remuneration Survey reflects the wage trends in Latvia in 2023. It includes information about remuneration practices in Latvian organisations, as well as data regarding wages and their components in various posts. This helps study the competitiveness of wages in Latvia.
Figure Baltic Advisory is a labour market research and management consulting company in the Baltics, formerly known in Estonia and Latvia as Fontes.
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