In a poll of 456 business leaders from eight countries – the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia, 69% said they planned to raise staff salaries in 2015, with 50% saying the increase could be up to 5%.
The most likely increase, as indicated by 37% of the business leaders, will be between 2.0% and 4.9%.
For 41% of the respondents, a shortage of qualified staff and pressure from employees are the main drivers for pay rises while 28% think they should be the result of higher productivity and 25% expect to award rises due to improved financial performance.
On average, 50% respondents do not plan any notable staff changes, but 17% expect to have at least a 5% to 10% increase in employee numbers.
These renewed pressures faced by employers come against a backdrop of a fairly upbeat economic outlook for 2015. Around 52% of respondents expect their country’s GDP to increase between 1% and 2.9% and only 9% predict a decrease. Over 50% believe that inflation will remain under 2.0%.
“According to the survey results, the CEE8 economies are following a path of healthy GDP growth and low inflation, but as skilled labour and the ability to export are the key drivers of economic competitiveness, the focus in the surveyed companies is increasingly on the quality of employees,” comments Serban Toader, Senior Partner at KPMG in Romania.
Within CEE, 75% of respondents think that the shadow economy is a problem and that tax avoidance by concealment of real income is a pressing issue.
At the same time, 69% of the respondnts said they are planning investments in 2015-2017 with activity concentrated on their home markets and on neighbouring countries.
The KPMG survey was based on the responses from 456 executives, managers and company owners, of which 29% in industry sector and 14% in wholesale and retail trade sector.