Personnel Turnover Dramatically Influences Corporate Salaries and Spendings

Romanian companies reported a substantial 47% increase in salaries between July 2007 and June 2008, according to Paylogic CEO Cristian Udrescu. This trend completes the analysis made for the entire year of 2007, when an average growth of 53% was recorded. The situation is the result of both anincrease in the number of employees (+20% approximately), and an increase in employee revenues by an average of 25% for that period. Paylogic, a company specialised in outsourcing payroll services and personnel management, performed the research on a sample of some14,000 employees countrywidein various sectors (production, services, retail, financial and pharmaceutical). The research points to a significant increase in overtime hours, by as much as 100% in some companies, the average being 25%. Hard work and, implicitly, the employers" pressure on employees led to a significant increase in sick leave hours, the average increase reaching 58% in July 2008 compared to July 2007. Moreover, the personnel turnover reach alarming levels, with an average of 51% of the employees of the sampled companies quitting their job. " It is obvious that the existing pressure on the labour market and the decrease in the pool of valuable candidates prompted employers to demand more from their employees and so the number ofovertime hours increased signficantly. On the other hand, such pressure led to an increase in the number of sick leave hours, which often caused tense situations within companies, as employees on duty had to take on additional tasks from colleagues on sick leave, Paylogic CEO Cristian Udrescu, added. The biggest personnel turnover was logged in non-banking financial institutions, in the financial services companies and in retail, the average of each company surpassing the national average. "Personnel turnover and the continuous change in payment, followed by a huge volume of legal documents, prompted companies not only to perform a review of their revenues and personnel files, but also to seek outsourcing solutions through which they relieve themselves of a part of the costs and the complications generated by these activities," said Udrescu. The companies that managed to successfully counteract the personnel turnover are those in the pharmaceutic or car trade sectors. "The personnel turnover was decreased mainly through attractive salary packages, which also include non-financial benefits. The salary packages in these sectors aremuch over the national average, for all industies," Mr. Udrescu continues. The research made by PayLogic also points out that, forced by a clearly upward trend of personnel turnover, companies dramatically increased salaries, target bonuses and performance bonuses by an average of over 150%. A significant increase in salaries was also recorded in production companies, the base salaries growing by more than 20% and the number of overtime hours by 35%. "I believe that our research shows that the labour market continued to boil also in 2008, and will do so in the future, too. More and more companies prefer to outsource their payroll and personnel management services to specialized companies that offer both lower costs but also the option to pay more attention to the development of these core activities," Udrescu added.

PayLogic provides professional payroll and personnel management services for some 100 companies, that is over 14,000 employees. The number of employees increased by 35%, taking into consideration the fact that the turnover increased by 48% year-on-year. PayLogic was set up in 2001 and manages outsourced payroll and personnel management services. The Romanian headquarters is in Bucharest with two local offices in Timisoara and Medias. Among their customers are Mercedes-Benz Romania, Genpact, Cetelem IFN and Kromberg & Schubert.