Nationwide, Salaries Are on the Rise—From Graduates to Plant Managers

The Austrian economy continues to grow at pace, as do employees’ salaries. When compared to the previous year, salaries this year were a full 3.5% to 4.1% higher. Young professionals starting their careers and senior managers were the two groups recording the highest increases, with an increase in basic salary accounting for most of the rise. Like last year, economic growth was perceived as positive, with 56% of companies anticipating an increase or sharp increase in profitability. Around a third of companies were expecting more stable figures. These figures come from the recent study conducted by HR and management consultancy Kienbaum in Vienna, which analyzed the salary data of around 3,500 managers and more than 3,100 specialists from 400 Austrian companies.

Young professionals demanding higher starting salaries

“We’ve noticed how younger workers are increasingly aware of their value and are using that to demand things of their employers. Generous increases in basic salary of 4.5% amongst career starters with no more than three years of professional experience are the result of this development,” says Alfred Berger, head of compensation and performance management at Kienbaum Vienna.

According to the Kienbaum study, starting salaries for graduates in engineering and IT were notably high, at around 42,500 euros per year. Humanities graduates tended to receive the lowest starting salaries, averaging around 39,200 euros per year.

Variable pay down slightly

Bonuses remained a key component of compensation packages, but their proportion within the overall package had fallen slightly since last year. This can largely be attributed to the significant increases in basic salary, while variable components had not been increased at the same rate. As in previous years, the number of top managers receiving a performance-related component within their compensation was 93%, with managers at this level of organizations typically taking around a quarter of their pay as variable. One level below, 87% of managers reported receiving around 18% of their overall salary as a variable component. The figure for middle management was 82%, with managers taking a variable component of around 14%, while for the lowest level of management, the figures were 73% and 10% on average. Individual performance assessments gained in importance when compared to the previous year; where only 13% of variable pay was tied to personal performance a year ago, the figure has since risen to 19%. “A manager’s actual performance now accounts for a higher proportion of variable remuneration. At 42%, a company’s profit still had the greatest influence on bonus levels, but we’ve seen developments towards rewards for leadership qualities,” explains Alfred Berger. Other factors influencing the variable component were turnover, at 17%, and qualitative reference figures, at 19%.

Company cars remain the most popular benefit despite falling budgets—except for top management

The company car remained Austria’s number one fringe benefit, although the study noted a change when compared to the year before. “Once again, virtually every board member has a company car this year, but budgets have increased considerably. Where a car could cost 54,000 euros last year, upper management levels had 60,000 euros to spend this year,” says Alfred Berger. For other managers, a budget of 30,000 to 45,000 euros was typical. For specialists and lower-level managers, there was a noticeable contraction in budgets for company cars. In addition to vehicles financed by the employer, other fringe benefits were reported as having increased in popularity. “The company mobile phone as a traditional benefit is beginning to see competition from company bicycles, fitness classes, subsidized food, and childcare. Employers are increasingly devising ways to retain top performers. Nevertheless, in Austria we also saw great room for improvement—after all, the competition is also out there on the hunt for the best talent,” concludes Alfred Berger.