On the other hand, the last four years have seen the top ten steel industry companies shed around a third of employees, from around 30,000 in 2007 to a little over 20,000 last year, with the trend of the last decade being to upgrade the plants. They now need fewer employees, but better-skilled ones.
For instance, employees of Russian group TMK, which owns two plants in Romania, in Slatina and Resita, have seen their wages up over 50% during this period. Whereas in 2009 an employee of pipe manufacturer TMK Artrom Slatina (ART.RO) had an average net wage of 1,654 lei (EUR392), this year the company’s net average wage reached RON2,549 (around EUR600).
The wages of TMK Resita employees rose 53.7% to an average RON2,278 (EUR540).
The wage raises come at a time when the turnover of the Resita plant is expected to go up three times from the 2009 value, i.e. RON866 million (EUR205 million), while Artrom’s turnover is set to surge 90% this year.
Another plant, owned by Russian group Mechel, special steel manufacturer Mechel Targoviste (COS.RO), has budgeted a 48% increase in costs per employee compared with 2009, of RON2,602 (EUR617)/employee, from RON1,747 (EUR414) two years ago. However, the number of employees has gone down by 26% during this period, to 2,192 employees.
Among the reasons cited by HR specialists for these rises is the fact that the plants’ trade unions are powerful.
“Wage percentage increases in the heavy industry were higher than in other sectors, as well as in the overall industrial sector as opposed to other economic sectors, but this sector also saw the most layoffs,” says Oana Dakti, country manager of Consulteam, which is a representative on the Romanian market of Mercer, a company that conducts yearly wage surveys.
“Let’s not forget that the minimum wage has also gone up, and that the bulk of a plant’s wage costs are those involving production workers, and that production has gone up significantly,” she adds.
Not all steel plants gave their employees spectacular raises.
Wire maker Mechel Campia Turzii (INSI.RO) increased wage expenses per employee by 15% in 2010. Such expenses are to go down slightly in 2011 according to this year’s budget projections.
Indian billionaire Lakshmi Mittal has raised wages in the five plants he owns in Romania by 8% to 10% in the last two years, union leaders say. Mittal controls about half of the Romanian steel industry and its biggest plant, located in Galati.
(EUR1=RON4.216)