Gerard Koolen
As an HR consultancy firm we undertake many salary benchmarking surveys. We carry out these surveys for both international companies as well as pure (traditional) Slovak-owned companies. In average the international company (but also the modern/young Slovak company) pays 35% more. For single-job families the differences can be even bigger: HR Professionals earn 50% more at international companies than at Slovak companies!
In the surveys we thoroughly examine differences in job profiles, descriptions, competence levels, output of the employee, his or her individual profile (skills, experiences, education, personality etc.) and many other items influencing salary levels. Some of our findings are outlined below.
Language Skills
When international companies came to Slovakia the demand for staff with German and English language skills increased. Because of the high demand and relatively low supply, salaries were pushed upwards. Until recently not many Slovak companies required English and/or German speaking skills and were not forced to pay higher salaries to attract these skills.
Higher salaries used as distinguishers
Many international companies found themselves in the position that they could afford to pay higher salaries to distinguish themselves from other companies, for example to be regarded as a quality employer and to establish a good image in the labour market. This means that although many international companies do not have to pay higher salaries, they want to pay higher salaries as part of their HR strategy.
Salary surveys increase salary levels?
Many international companies have salary surveys. The majority of international businesses purchasing salary-benchmarking surveys are paying higher than average salaries. The reason is that many surveys are only carried out for international companies. International companies pay higher salaries than other companies. This way the HR Manager bases his or her salary policy on the highest salaries being paid. Therefore it is recommended that any survey include a sample of Slovak companies.
In search of excellence
Paying higher salaries can provide you with better people, and especially at middle and top management level you need to pay competitive salaries. To acquire top talent and to retain the most talented people you must be willing to pay for it. The big difference between Slovak and international companies in this respect is that international companies want and can pay higher salaries. Many owners and top managers of Slovak companies simply do not want to pay, or they do not have the resources to pay.
The location of the company
Many international companies, especially ICT companies, trading companies and service providers, are located in Bratislava. The capital has the lowest unemployment rate in Slovakia, the highest living standards and the largest number of talented people. These are all salary increasing factors.
International companies operating in remote locations do not pay much higher salaries than their Slovak colleagues. The average salary increases from Michalovce, the most Eastern located city in Slovakia, to Bratislava. Generally, an employee in the region of Michalovce is paid 12% to 30% less then an employee in Trnava for the same job and with comparable skills. An HR manager in Humenné, near Košice, is paid 49% less than his or her colleague in Nitra.
Nevertheless the big salary gap between West and East Slovakia is closing gradually to a more realistic level as international production companies spread all over Slovakia.
Paying or not paying for overtime?
Domestic companies look at a basic salary without overtime. This means that the employee gets his or her overtime paid. At many international companies overtime is included in the salary - again one of the reasons for higher wages.
Gerard Koolen is a partner at Lugera & Maklér. His column appears monthly. Send comments or questions to gerard.koolen@lugera.com.
