HRM PPT on placement , induction and socialization
Labor market and salaries in Russia, 2014
1. Labor Market and Salaries in
Russia 20.5.2014
Samuli Pesu
Partner
Awara Group
2. Awara Group
LEGAL ACCOUNTING
RECRUITMENT
& TRAINING
MARKET
RESEARCH
200
specialists
6 offices
3
countries
Practical
solutions for
business
needs
Guidance for
risk
management
Best customer
service &
communication
2
4. 12 Million Cities (census 2010).
74% Urban Population
Source: RIA Novosti
and GKS
5. Million Cities in Russia (census
2010)
11.5
4.9
1.5 1.4 1.3 1.2 1.2 1.1 1.1 1.1 1.1 1
Source: GKS
6. Labor Force in Russia (total
75.4 million) in Q4 / 2013
7
2.8
3.8
0.7
1.4
2.3 1.8 1.7 1.3
2.1 1.9 2.1 2 1.4
Source: GKS
7. Unemployment Rate (%) in
Russia in 4Q / 2013
5.6
2 2
2.8
4.7
5.7 6.1
4.4
2.7
7.4
4.2
6
4.4
6.1
7.6
Source: Rosstat
8. Salary Index in Russia (Russia
average 100) in Q2 / 2013
70%
75%
72%
84%
86%
82%
78%
78%
94%
85%
100%
121%
125%
197%
100%
0% 50% 100% 150% 200% 250%
Volgograd oblast
Republic of Bashkortostan
Rostov oblast
Chelyabinsk oblast
Republic of Tatarstan
Omsk oblast
Samara oblast
Nizhny Novgorod oblast
Sverdlovsk oblast
Novosibirsk oblast
Leningrad oblast
Moscow oblast
St. Petersburg
Moscow
Russia
Source: Mojazarplata.ru, analysis by Awara
9. Increase of Wage to Previous
Year vs. Inflation 2000 - 2013
20.9
19.9
16.2
10.9 10.6
12.6 13.3
17.2
11.5
-3.5
5.2
2.8
8.4
17.9
21.0 21.6
15.8
13.7
10.9
12.7
9.7 9.0
14.1
11.7
6.9
8.5
5.1
6.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Increase of Average Monthly Wage to Previous Year (%) Inflation (%)
Source: Rosstat and Деловая жизнь
10. Minimum Wage (1.1.2014)
Russia = RUB 5 554 (EUR 111)
St. Petersburg = RUB 8868 (EUR 177)
Moscow = RUB 12 600 (EUR 252)
Real salaries much higher
10
11. Employer's Insurance
Contributions
The insurance contributions are paid in full at a rate of 30% for an
annual income (from the same employer) of up to RUR 624,000
(EUR 12460), after which limit the income is subject to a rate of 10%
without any further limitations.
Under the general rule the 30% insurance contributions are divided
as follows:
– 22% is contributed to the Pension Fund (10% tail exceeding the
limit goes here as well);
– 2.9% is contributed to the Social Insurance Fund;
– 5.1% is contributed to the Compulsory Medical Insurance
Federal Fund
Source: Awara Russian Tax Guide
11
12. Insurance Contributions
In addition, the rates for mandatory work-related accident and health
insurance range from 0.2% to 8.5% of the total salary.
Foreign nationals that have received a work permit under the
privileged status of a so-called highly qualified specialist are exempt
from insurance contributions (except mandatory work-related
accident and health insurance).
Source: Awara Russian Tax Guide
12
13. Employer’s Cost
For an office employee in Moscow to receive 5000 EUR net
salary, the employer must pay the following:
– 5000 / 0.87 (13% income tax) = 5747 EUR gross monthly salary.
Annual gross salary 5747 EUR x 12 = 68964 EUR
– Annual Insurance contributions (30% on 12460 EUR + 10% on
56504 EUR over the limit) = 9388 EUR .
– Mandatory work-related accident and health insurance (0.2% on
annual gross salary 68964 EUR) = 138 EUR
Total sum: 78490 EUR / year
Monthly: 6541 EUR
13
14. Two types of work permits available:
– Highly qualified work permit
• Rather easy process, takes about 1 month
• Valid for 3 years
• Personal income tax of 13% applies in Russia upon receipt of such
work permit
– Normal work permit
• Longer process, takes about 3-4 months
• Valid for 1 year
• Necessary to obtain quota (not for top positions)
• Personal income tax of 30% applies until foreign nationals have
stayed in Russia for 183 days over a 12-month period.
Source: FMS, Awara Publications
14
Foreign Employees Work Permits
15. SALARY SURVEY – AVERAGE BASIC
SALARY LEVEL (EUR) AFTER TAXES
2013-2014
26. 26
IT Manager Top Earners
5200
4200
5200
2600
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI
27. 27
E-Commerce & Online Marketing Salary
Survey in Moscow
4300
3000
2200
3000
7000
3900
3000
4800
E-Commerce Director Head of Internet
Projects
Social Media Marketing
Manager
Digital Marketing
Manager
Lower Range Average Higher Range Average
29. Recruitment Time at Awara
Middle management and specialists: 2 – 4 weeks
Top management and board members: 3 – 6
weeks
The above mentioned time periods are general
recruitment times for different level of positions.
Actual time of delivery depends on individual
requirements and client’s commitment to providing
necessary feedback and information.
