Recent fiscal measures changed methods of remuneration in business services industry

Recent fiscal measures changed methods of remuneration in business services industry

The evolution of salaries in the business services industry follows the general market trend with a 4% increase for industry specialists, recorded in March 2024 compared to September 2023, tracking an identical sample of companies, according to the HR Barometer study conducted by ABSL (Association of Business Service Leaders) in collaboration with PwC Romania.

 

Regionally, the capital leads in salary increases, with 4.7%, while Banat Transylvania recorded an increase of only 2.1%. The most significant categories of staff for which salaries have increased are executive managers (9.8%), team leaders (3.8%), specialists (3.9%), administrative staff (4.4%), and operators (1.9%).

The largest salary increases were made for employees working in services such as finance – accounting, HR, and support functions. The business services sector follows the general market trend of an estimated 8% increase in salary budgets for 2024, with one in three companies already implementing these measures in the first quarter.

Recent fiscal measures changed methods of remuneration in business services industry

“The salary dynamics are experiencing a slight decline compared to previous years, even in industries where competition for talent remains high. Amidst macro-economic uncertainty and with the expansion of automation across an increasing number of processes, there is a decrease in labor demand, as well as in individual mobility at the employee level. In the short term, we are witnessing a normalization of labor market relations, which had become extremely challenging for employers in recent years,” states Oana Munteanu, Director, People & Organisation, PwC.

The increased taxation of popular benefits in the industry—such as meal vouchers, holiday vouchers, or sports subscriptions—has had a negative impact on both company operations and HR policies. Four out of five employers now provide these benefits at their gross value, with the taxation being borne by employees. A small percentage of employers intend to fully or partially compensate for the loss suffered by employees for various benefits (4% in the case of holiday vouchers and 34% for meal vouchers). However, companies in the industry will continue to offer benefits such as sports memberships, medical services, and private pensions, even though the tax reductions are not at the same level as before. While parental benefits are beginning to interest employees, only 4% of companies in the industry provide additional days off for parent employees. Three out of four companies offer paid days off beyond the legal limit for fathers.

“The business services industry has a significant contribution to Romania’s GDP, being among the top five industries in the country from this perspective. The quality of human resources relative to their cost has long been a competitive advantage in attracting investors to Romania. In this context, the increasingly frequent discussions about progressive taxation, without consultation with the business community, without predictability, and without a national strategy to support long-term economic growth and retention of highly skilled labor, can negatively impact us,” says Cătălin Iorgulescu, Vice President of ABSL.

Only 18% of companies in the business services industry are considering reducing human resources costs, and among these, reductions will predominantly be in the area of salary costs (capping). The rest of the companies in the industry continue to allocate resources especially for training and development, employer branding, and employee loyalty.

According to the HR Barometer conducted by ABSL, the business services industry is a market leader in implementing gender equality measures in salary practices and ranks among the top three industries in implementing policies of equality, diversity, and inclusion. More than half of the companies in the industry have implemented or are considering implementing ESG (Environmental, Social, and Governance) standards this year.

More than half of the companies in the business services industry require a minimum number of office days (between 1-3 days), while flexibility remains essential for another third of respondents.

The HR Barometer for the business services industry was conducted by PwC Romania in partnership with ABSL at the end of March, based on a sample of 50 companies. It captures the evolution of salaries and other human resources indicators in the sector, as well as how companies are prepared to report sustainability/ESG (Environmental Social Governance) practices mandated by the European Union.